The crypto market extended its narrow trading range through Tuesday, limited by low volume and a low liquidity environment.
Daily trading volume for Bitcoin fell 25% to $35 billion in the last 24 hours and ether volume decreased 21% to $24.6 billion.
A drop in volatility can be attributed to general crypto market apathy, which has occurred alongside a euphoric rally in precious metals.
Gold is currently trading at $5,085 after hitting a series of record highs over the past week, while silver is up more than 57% year-to-date as traders flock to safe-haven assets.
The rotation into metals is clearly visible on derivatives exchange HyperLiquid, with silver futures now approaching $1 billion in daily volume. That’s more than all other assets except bitcoin and ether, although it’s worth noting that funding rates are showing a negative bias, suggesting traders are shorting strength rather than buying a potential high.
As US President Donald Trump imposed new 25% tariffs on South Korea on Monday following a political spat with the European Union over Greenland last week, risk aversion could persist even further.
Derivative products
- More than $270 million in leveraged cryptocurrency futures bets were liquidated by exchanges in 24 hours, with bear plays (shorts) accounting for the majority of the total. The numbers show traders were positioned for a bigger market-wide decline following bitcoin’s 7% decline last week and were caught off guard by the rebound from $86,000 to near $88,000.
- Volmex’s 30-day bitcoin and ether implied volatility indexes remain near multi-month lows, indicating no signs of panic or fear, even as feeds and technical charts paint a bearish picture.
- Open interest (OI) on futures contracts linked to Hyperliquide’s HYPE token jumped 30% to over 57 million HYPE, closing in on December’s record of 57.44 million HYPE. The decentralized exchange has reportedly regained market share against its rivals Aster and Lighter.
- The OI in ETH, SOL, XRP and DOGE increased by 2-3%, while the OI of BTC remained stable.
- Annualized perpetual funding rates for most majors remain moderately positive, a sign of a bullish bias, but nothing out of the ordinary. TRX and DOGE rates turned negative, indicating dominance of the shorts.
- On Deribit, BTC and ETH puts continue to trade at higher prices than calls, a sign of continued bearish fears. Downside protection is now a crowded market, according to some observers, and call options appear relatively cheap for those with a bull market thesis.
- Bearish directional positioning such as put spreads and volatility bets, straddles and strangles, cumulatively account for almost 50% of all BTC block transactions over 24 hours. In the case of ETH, traders preferred the iron condor, a strategy to take advantage of a limited potential market.
Symbolic discussion
- Impressive volume in the silver futures market boosted HYPE, HyperLiquid’s native token, by more than 22% in the last 24 hours, with trading volume more than doubling to $510 million.
- zcash privacy coins and monero has risen 4% and 3%, respectively, since midnight UTC, outperforming bitcoin and crypto majors ETH, XPR and SOL, which have all fallen between 0.4% and 1%.
- Pump.fun’s native PUMP token saw significant growth, rising 14.5% since midnight, as traders and token traders attempted to extract value from the memecoin market despite broader market stability.
- January trading volume on Pump.fun has already surpassed $10 billion, reaching its highest level since June with four days remaining in the month, according to DefiLlama.
- The bitcoin-dominated CoinDesk 20 Index (CD20) is little changed since the start of the year while the altcoin-heavy CoinDesk 80 Index (CD80) is up 3.6%.
