Bitcoin suffered further losses on Thursday after bearing the brunt of soaring energy prices, with Brent crude climbing to $114 and Oman crude to $150.
European natural gas futures followed suit, jumping about 25% to over $78 per MWh on Thursday, as Iran attacked key Gulf energy infrastructure after an Israeli strike on its South Pars gas field.
Bitcoin traded near $70,000, having lost 1.6% since midnight UTC, while Ether (ETH) fell 1.7% to $2,160.
The Federal Reserve also had an impact after leaving rates unchanged in the 3.50% to 3.75% range on Wednesday, pausing its rate cut cycle to boost the US dollar.
As a result, risk assets fell across the board, with Nasdaq 100 futures down about 0.3% since midnight UTC.
Positioning of derivative products
- Nearly $600 million in leveraged crypto futures bets were liquidated by crypto platforms in 24 hours, with long or bullish positions accounting for the majority of the total. The overnight price drop clearly caught the bulls off guard.
- Sector-wide, open interest (OI) futures fell 5.6% to $106.90.
- OI Ether futures fell 9% as the token’s spot price fell 6%. This combination represents capital outflows.
- Futures linked to gold tethered (XAUT) and privacy-focused ZEC saw double-digit declines, indicating investors’ risk aversion.
- Bearish short plays are in demand again, as evidenced by negative funding rates for BTC, ETH, BNB, SOL, and other tokens. The 24-hour cumulative volume delta for most of these coins is negative, underscoring the position.
- Fear has returned to the market. Volmex’s BVIV, which measures implied or expected volatility in bitcoin prices over 30 days, jumped more than 5% to 58.36%, ending a week-long decline. The same goes for ether.
- On Deribit, Bitcoin and Ether sell biases strengthened, once again indicating increased downside concerns.
- Block flows featured an outsized demand for ether overlaps, a volatility strategy. In the case of BTC, traders looked for risk reversals and put spreads.
Symbolic discussion
- Several altcoins suffered deep declines on Thursday, including bittensor (TAO) and hyperliquid (HYPE), which lost 8.8% and 6.5%, respectively, since midnight.
- The altcoin market’s developments can be attributed to the lack of liquidity in a market that remains fractured following a $19 billion leverage wipe in October.
- A few select tokens showed strength despite the broader market downturn. NEO rose 4.2% and restructuring token ETHFI continued its strong start to the year, adding 1.5% to $0.55.
- The CoinDesk 20 (CD20) is in the red after losing around 1% since midnight, while the DeFi Select Index (DFX) and CoinDesk Memecoin Index (CDMEME) are down 1.4% and 2%, respectively.
