The crypto market worsened a negative week with a continued decline on Friday. Bitcoin fell to $100,600 and ether stands at $3,270.
The move appears to be in line with the broader crypto market trend of late, which has seen BTC lose 18% of its value over the past 30 days. The CoinDesk 5 Index (CD5) of the largest and most active tokens and the broader CoinDesk 20 Index (CD20) lost around 3% over the past 24 hours.
The fallout can still be attributed to comments from the Federal Reserve earlier in the week suggesting a potential cooling of the rate-cutting cycle, causing the U.S. dollar to rise and risk assets to collapse.
The altcoin market, with the exception of AI tokens, is performing worse than bitcoin, with the “altcoin season” index at 22/100, its lowest in more than 90 days.
Positioning of derivative products
By Saksham Diwan
- The BTC futures market continues to reflect caution and low conviction.
- Open interest (OI) is showing a slow but steady downward trend, standing at $24.91 billion. That’s down from $26 billion last week, indicating traders are reducing leverage.
- The three-month annualized basis is low, between 3 and 4 percent, and funding rates are less than 10 percent annualized on major exchanges.
- The suppressed deleveraging and derivatives metrics together reinforce a general environment of low profitability and a lack of strong directional commitment from futures.
- The BTC options market, on the other hand, is showing mixed but strongly bullish signals.
- Despite a short-term shift in the implied volatility (IV) term structure, indicating short-term volatility, the trading bias is decidedly bullish.
- This is confirmed by the 24-hour put/call volume tilting 64-35% in favor of calls and the one-week delta of 25 holding at 10%, meaning traders are paying a clear premium for very short-term upside exposure.
- The drop in Bitcoin price resulted in $601 million in liquidations over the past 24 hours, with 65% of losses borne by long positions, confirming the impact of forced selling. Importantly, with BTC’s current price around $101,000, the psychological $100,000 level is now reinforced by multiple $30 million-long liquidation walls, positioning it as a strong support level likely to be aggressively defended by the market.
Symbolic discussion
By Olivier Knight
- The altcoin market faced increased downward pressure on Friday, led by a 5% decline. and a drop of 3.5% for ether .
- Both tokens are now approaching critical support levels that provided short-term relief on November 4. A break below these levels would signal continued decline.
- CoinMarketCap’s “altcoin season” index is at 22/100, its lowest level in more than 90 days, as traders dump tokens lacking liquidity ahead of a potential sale.
- Last month’s leverage-inspired pullback exposed several vulnerabilities of altcoin order books, including how the lack of resting limit orders can cause dramatic spikes when volatility increases, which subsequently causes a wave of liquidations on derivatives exchanges.
- Another metric that may worry bulls is that the average Relative Strength Index (RSI) indicator is at 49.52/100, no longer oversold as it was earlier this week. This means that the market is now neutral and no longer likely to rebound.
- However, the altcoin market is clinging to one glimmer of hope heading into the weekend: the AI sector is booming.
- FET is up 23% in the last 24 hours and NEAR is right behind with a 22% gain. Volume profiles for both tokens suggest retail participation, with significant flows on Binance and Kucoin.
