The crypto market is facing one of its toughest tests yet, with bitcoin. price breaks below the crucial $98,000 support level following a wave of selling pressure amid low liquidity environment.
The selloff resulted in more than $1.1 billion in liquidations, about half of which was on Bitcoin trading pairs, according to CoinGlass.
The altcoin sector performed worse, with ether fell 9% in 24 hours, while a number of altcoins suffered double-digit declines. The CoinDesk 20 index slipped 8%, even with the best performers, losing 3%.
The crypto fall coincided with a massive sell-off in stocks. Nasdaq Futures (NQ) lost 2.95% of their value over the past 24 hours.
Positioning of derivative products
By Omkar Godbole
- Bitcoin’s 30-day implied volatility index, BVIV, which hit an annualized peak of 50% during Asian hours, has fallen back to 47.8% even as the spot price remains near daily lows of around $97,000.
- This suggests that despite the recent sell-off, there is no panic buying of options, indicating a more measured market response.
- Ether volatility indices paint a similar picture.
- Open interest (OI) on BTC-related futures remains stable, while OI on ETH, SOL,
- On the CME, the ether futures premium fell to 4.26%, the lowest since April, while BTC remains relatively high above 5%. This is a sign of reduced demand for ETH relative to BTC, even though the price of ETH has increased relative to BTC.
- The market collapse has boosted demand for BTC and ETH on Deribit. Block flows into BTC featured put spreads and risk reversals. In the case of ETH, put spreads and diagonal calendar spreads dominated the flows.
Symbolic discussion
By Olivier Knight
- The altcoin market was decimated on Friday by weak liquidity selling as ether slipped over 9% in 24 hours and tokens including aave , And lost more than 10%.
- According to CoinGlass, more than $1.1 billion in derivatives positions were liquidated during the same period, with $510 million attributed to bitcoin.
- Several altcoins have now fallen to their lowest level in several months. Aave is now trading at its lowest level since May and ETH at its lowest since July.
- The altcoin market will depend on whether market anchor Bitcoin can break out of danger and move back above the $98,000 support level.
- Failure to do so would confirm a downtrend and a potential bear market reversal from October’s high of $126,000.
- There was one silver lining for altcoins: the privacy coin sector. Zcash and monero were both in the green on Friday as they defied market pressure.
- ZEC is now up more than 1,000% since August as investors come full circle, returning to a narrative focused on libertarian politics rather than speculative gains.
