Bitcoin pulled back from Monday’s high, when it touched the highest price since mid-November. This is the same level that the largest cryptocurrency approached and failed to cross in early December.
While some traders will short this level as a sign of resistance, others will consider a potential breakout that could lead to a run towards $98,900 – a key support level between June and November.
Altcoins rallied, with SUI adding more than 3% since midnight UTC to add to a 16% 24-hour rally, while XRP continued its blistering start to the year with a 29% rise since January 1.
There has also been notable activity in the memecoin sector, with trading volumes on Solana-based token issuer Pump.fun hitting a record high of $1.27 billion, indicating activity among retail traders. The CoinDesk Memecoin Index (CDMEME) rose 1.5% to bring its year-to-date gain to 19%.
Positioning of derivative products
- Crypto futures bets worth over $400 million have been liquidated in the past 24 hours. On Monday, most of them were short sales, a sign that traders entered the new year expecting prices to fall.
- Open interest (OI) in global BTC futures remained stable at around 660,000 BTC over 24 hours, while OI in XRP jumped to 2 billion XRP, the highest since October 11. The increase indicates capital inflows into the XRP market as the token’s price reached multi-week highs.
- Funding rates for most major cryptocurrencies remain moderately positive, indicating a bullish bias. Tokens such as SOL, TRX, ZEC, SHIB and UNI stand out with negative rates, indicating an accumulation of bearish short positions.
- Volmex’s BVIV index, which represents BTC’s 30-day annualized implied volatility, reversed Monday’s small spike from 44% to 47%, signaling continued calm.
- On Deribit, the sell bias in BTC and ETH continued to ease as traders looked for upside via calls.
- Block flows featured BTC and ETH call spreads and BTC strangles.
Symbolic discussion
- Memecoins are back on the map after a rough year that resulted in withdrawals of over 95% across the board. The renewed optimism comes as daily trading volume on Pump.fun, the Solana-based token generator, hit a record high of $1.27 billion on Monday.
- There has also been activity on the BNB chain as retail traders flock to primarily Chinese-language tokens that fall under the umbrella of the “Four Meme,” a phrase coined by Binance founder Changpeng Zhao.
- Memes aside, Sui’s native token, has seen some upside, increasing 3% since midnight and 16% in the last 24 hours after Mysten Labs, the developers behind Sui, published a research paper on private crypto transactions, leading the community to speculate on whether Sui would add privacy features to its blockchain.
- CoinMarketCap’s “altcoin season” indicator is at 27/100, still firmly in “bitcoin season” territory, but far from the December low of 14/100, demonstrating early signs of strength in the sector.
- There are warning signs, however, with the average cryptocurrency Relative Strength Index (RSI) reading “overbought” to suggest that several altcoins could face a period of profit-taking in the near term.
