The crypto market remained slow and weak on Wednesday as bitcoin and ether (ETH) have fallen less than 0.4% since midnight UTC and the CoinDesk 20 Index (CD20) has lost 0.9%, with 18 of its constituents down.
The lack of a significant rebound will be the biggest concern, especially as U.S. stock futures have started to recover following Tuesday’s tech selloff.
Part of the altcoin market has outperformed its peers, with Jupiter (JUP) and Monero (XMR) posting gains between 2% and 4%, suggesting that investor appetite is still alive despite bearish market conditions.
Bitcoin must now avoid falling back below the psychological support level of $60,000, which would trigger a return to a trading range not seen since late 2024, with $52,000 emerging as a key level on the downside.
Positioning of derivative products
- Trading slowed in the derivatives market, with volume down 27% to $141 billion over the past 24 hours, while open positions rose 2% to $106 billion. Liquidations totaled $158 million, the lowest level in two weeks.
- BTC futures open interest (OI) holds at around 730,000 BTC for the eighth consecutive day, signaling consolidation at current levels.
- ETH futures show renewed action. OI reached 14.3 million ETH, the highest in two weeks and up from a recent low of 13.74 million.
- The increase occurred as the spot price rose from around $1,780 to $1,650 over the past two days, a combination that typically indicates traders went short in the rally. While funding rates remain slightly positive, showing some bullish exposure demand, the 24-hour cumulative volume delta (CVD) is negative, a sign that bears are directing price action via market orders rather than passive limit orders.
- SOL futures are busier than ever, with OI reaching a lifetime high of 77.68 million tokens. But funding rates and 24-hour OI-adjusted CVDs are negative, meaning the action is driven by further shorts, or bearish bets, in the token.
- In contrast, the ZEC market is cooling rapidly, with OI falling to 2 million tokens from nearly 2.55 million tokens last month.
- Generally speaking, bears appear to be leading price action in most of the top 25 tokens, as shown by negative OI-adjusted CVDs for the second day in a row.
- Bitcoin’s 30-day implied volatility index (BVIV) cooled to 43%, down from nearly 48% on Tuesday. The Ether Volatility Index shows a similar trend.
- On Deribit, the one-week spread widened to 10.9 volume points in favor of puts from around 7 points a day ago, a clear sign of intensifying bearish concerns. The one-month gap has also widened.
- Block flows on Paradigm featured a straddle strategy involving call and put options with a strike price of $62,000, both expiring on July 3. A straddle buyer is betting on high volatility.
Symbolic discussion
- While Monero and Jupiter performed well heading into Wednesday, the same cannot be said for Ethena (ENA), Pump (PUMP), and Stellar (XLM), which have all fallen between 2.2% and 3.5% since midnight UTC.
- Ethena has now lost more than 90% of its value since reaching an all-time high of $0.87 last September. The yield-generating DeFi platform suffers from a strategy that depends on bullish market conditions, including positive funding rates.
- Similar withdrawals were seen on veteran tokens such as And which failed to reach their respective 2021 highs during the recent bull market, effectively trading in a macro downtrend since then.
- The US Dollar Index (DXY) continued to advance on Wednesday and is now challenging its May 2025 high. A strengthening dollar is generally seen as negative for risk assets, including altcoins, as it suggests investors feel safer with liquidity.
