The crypto market fell on Thursday with bitcoin losing about 0.7% since midnight UTC following Wednesday’s rally to a three-month high of $82,800.
Ether lost about 1% during opening hours in Asia and Europe, now trading at $2,325 after briefly surpassing $2,420 on Wednesday.
The market as a whole is showing early signs of a bullish reversal after a two-month consolidation pattern between February and April, although it should be noted that Bitcoin needs to break above $98,000 in order to break its current cycle of higher highs and lower lows.
The altcoin market continues to indicate investor turnover, with companies like ALGO and TON up 8% to 9% since midnight UTC.
U.S. stock futures are flat on Thursday while the dollar index (DXY) is down about 0.1% as investors remain hopeful about a deal ending the war in Iran.
Positioning of derivative products
- Cryptocurrency futures market activity remained relatively subdued over the past 24 hours, with total futures volume increasing just 3% to $216 billion, while overall open interest (OI) declined 3% to $133 billion. The divergence between the two suggests positioning is narrowing rather than widening, indicating deleveraging across the market.
- BTC open interest fell to 762,000 BTC from 793,000 BTC a day earlier, ending a three-day streak of sustained positioning growth. Among major assets, DOGE saw the biggest decline in OI, down 6%, while XRP OI slipped around 1%. Declines in these assets suggest capital outflows and a reduction in short-term speculative appetite.
- DOGE positioning seems particularly weak. Funding rates remain negative at an annualized rate of around 6%, indicating that short positions are paying off long positions to maintain exposure. At the same time, DOGE’s 24-hour cumulative volume delta (CVD) is the most negative among major tokens, signaling aggressive selling pressure from market participants using market orders.
- BTC funding rates, meanwhile, remain broadly neutral after averaging around minus 4% annualized in recent weeks. Funding normalization suggests that excessive bearish positioning has largely been eliminated from the market. Some observers view this reset as constructive for BTC price action.
- In contrast, ETH and SOL both saw OI increases of 1% or more despite weakening spot prices. Rising open interest alongside falling prices generally suggests that new short positioning is entering the market, indicating that traders could be positioning for further decline in these tokens.
- TON continues to stand out on the positioning front. Open interest soared more than 10% to another record high, signaling a continued influx of capital into the asset. TON price briefly hit $2.90 earlier today, its highest level since September, and the token is now up 93% for the week. The simultaneous rise in price and OI indicates strong directional participation.
- TON, TRX, and ZEC are currently the only top 30 tokens showing positive OI-adjusted cumulative volume delta readings. This suggests that buyers are driving trading activity through aggressive market orders rather than passive limit bids. Most other major assets, including BTC, ETH, and XRP, continue to show negative CVD readings.
- In the options market, bullish sentiment remains evident on Deribit, where call options at strike levels above $80,000 continue to dominate the 24-hour volume leaderboard. According to Glassnode, traders with short gamma exposure could buy potential BTC above $82,000 to maintain their hedges. This could further build momentum.
- Meanwhile, the one-month volatility risk premium, which measures the gap between implied volatility (IV) and realized volatility (RV), has become positive again, according to Glassnode. This change indicates renewed demand for short-term options and suggests that traders are increasingly willing to pay for exposure to short-term volatility after a prolonged period of compressed expectations.
Symbolic discussion
- CoinDesk’s DeFi Select Index (DFX) and CoinDesk MemeCoin Select Index (CDMEME) are the best-performing benchmarks on Thursday, up 2.5% each as speculative trading begins to take effect.
- The Bitcoin-weighted CoinDesk 5 (CD5) and CoinDesk 20 (CD20) indices have been flat since midnight UTC, while the broader CoinDesk 100 (CD100) index was also slightly in the red.
- CoinMarketCap’s “altcoin season” indicator is now at 45/100, its highest level since late March after increasing 32/100 since the same period last month.
- Although the broader altcoin market is optimistic, the popular DeFi token MORPHO has lost 4.6% of its value since midnight UTC and 6.1% over the past 24 hours. it’s currently trading at $2.13, with investors taking profits following a rally earlier in the week that took it from $1.95 to $2.33.
