Crypto market in good mood Monday after bitcoin reached $93,350, its highest level since December 11, before giving back some of those gains.
Most of the movement occurred at midnight UTC, around the time Bitcoin futures trading opened on the CME exchange, which created a “gap” between $90,500 and $91,550.
These gaps are usually filled within a few days, meaning the price will likely return to the $90,500 level at some point during the week.
Traders are primarily focused on bitcoin rather than altcoins, with the sector’s largest asset up 1.33% since midnight, while the CoinDesk Meme (CDMEME) and Metaverse (MTVS) indices have lost 6.4% and 2.3%, respectively, over the same period.
Stocks and precious metals also rose overnight, suggesting a risk-on approach following recent U.S. action in Venezuela.
Positioning of derivative products
- Exchanges liquidated leveraged crypto futures bets worth $260 million in the past 24 hours, with shorts accounting for most of the action. In other words, leverage was biased downward and caught off guard by rising prices.
- Open Interest (OI) in BTC, its offshoot as well as XRP and BNB increased between 2% and 5% in 24 hours, while ETH, SOL, DOGE and ZEC experienced stable to negative OI. These divergent trends indicate that investor risk appetite has only improved for a few select tokens.
- Aside from BCH, BTC, BNB, XLM, the OI-adjusted cumulative volume delta for the other top 20 coins has been negative over the past 24 hours, indicating net selling pressure in the market.
- BTC’s annualized perpetual funding rates have exceeded 10%, a sign of growing demand for bullish exposure. Rates for several altcoins remain below zero.
- On Deribit, the bias toward BTC puts weakened across the board as traders continued calls during the $100,000 strike.
- Block flows included BTC put spreads and ETH call spreads.
Symbolic discussion
- Although traders focused on bitcoin, a number of tokens outperformed the broader market on Monday.
- This includes new LIT, the native token of the perpetual exchange Briquet, which is up 3.9% since midnight, while AI-focused FET continued its weekend rally with a 7.4% rise since midnight.
- Warning signs persist, however, with the average cryptocurrency Relative Strength Index (RSI) flashing at 58/100 as it enters “overbought” territory. This suggests that a short-term decline is to be expected, as those making profits are likely locking in their gains.
- Some tokens failed to capitalize on the overnight rise: Zcash is down 2.5% since midnight while memecoins doge (DOGE) and pepe (PEPE) have lost 1.4% and 4.5%, respectively.
- The fragmented performance in the altcoin market shows two things: trader indecision and the persistent lack of liquidity that have ravaged the crypto market since the October selloff.
