The crypto market saw a recovery on Monday following the weekend’s $500 billion bloodbath that led to a $10 billion drop in open interest.
Bitcoin rose 1.4% while ether outperformed with a gain of 2.5%. meanwhile, stole the show with a 120% rally, as traders anticipate “perpetual wars” between the decentralized trading platform and HyperLiquid.
Plasma and aster both failed to benefit from Monday’s rally, losing 4.2% and 2.5% respectively.
Positioning of derivative products
- The BTC futures market has stabilized after a volatile period. Open interest, which had fallen from $33 billion to $23 billion over the weekend, has now stabilized at around $26 billion. Likewise, the 3-month annualized basis has rebounded to the 6-7% range, after dropping to 4-5% over the weekend, indicating that bullish sentiment has largely returned. However, financing rates remain a major point of divergence; while Bybit and Hyperliquid have stabilized around 10%, Binance’s rate is negative.
- The BTC options market is showing a new bullish trend. The 24-hour Put/Call volume has shifted to be more in favor of calls, now at over 56%. Additionally, the 1-week Delta Skew increased to 2.5% after a period of stagnation.
- These metrics indicate a market with increasing demand for upside exposure and upside protection, reflecting a move away from recent “prudent neutrality.”
- Data from Coinglass shows $620 million in liquidations over 24 hours, with a 34-66 split between long and short positions. ETH ($218 million), BTC ($124 million), and SOL ($43 million) were the leaders in terms of notional liquidations. Binance’s liquidation heatmap shows $116,620 as the base liquidation level to watch, in case of a price rally.
Symbolic discussion
By Olivier Knight
- The crypto market kicked off Monday with a rebound following a sharp weekend leverage surge. According to data from CoinMarketCap, the total crypto market cap climbed about 5.7% over the past 24 hours, with volume jumping about 26.8%, suggesting that those liquidated over the weekend are buying back their positions.
- A total of $19 billion in derivatives positions were wiped out over the weekend, with the vast majority going to those who held long positions. Over the past 24 hours, however, $626 billion was liquidated, including $420 billion in the short term, demonstrating a reversal in sentiment, according to CoinGlass.
- The recovery has been timid so far; Bitcoin’s dominance remains high at around 58.45%, down slightly from recent highs, implying that altcoins may still lag behind as capital accumulates towards safer large-cap names.
- The big winner of Monday’s recovery was which is up more than 120% ahead of a crypto trading competition that will see it potentially spark “perpetual wars” with HyperLiquid.
