Cryptocurrency prices have fallen over the past 24 hours, with the CoinDesk 20 Index (CD20) losing 1.7% and all members falling. Token prices were hit by a selloff in U.S. stocks after tech companies Meta (META) and Microsoft (MSFT) raised their AI investment forecasts, sparking concerns of overspending.
Bitcoin was the least changed among the 20 largest cryptocurrencies, falling 0.2% to just under $110,000 on the 17th anniversary of the publication of its white paper. The next best performer, ether fell 1.3% as the broader altcoin market entered the weekend after seven generally weaker days.
Directional signals from derivatives are mixed. Bitcoin futures are showing no clear trend, with funding rates little changed, open interest only slightly lower, and the three-month annualized basis remaining subdued.
Options have moved towards neutral to bearish sentiment in the near term, although overall there is a positive structural bias with a premium being paid for call options in the short term.
Positioning of derivative products
By Saksham Diwan
- The Bitcoin futures market is in a state of consolidation, with no clear trend emerging.
- Open interest (OI) decreased slightly to $26.16 billion, although it remains elevated.
- Funding rates at most locations have changed little, indicating weak overall demand. There is, however, isolated bullish demand on specific platforms, such as Deribit, where rates have reached an annualized rate of 8%.
- The three-month annualized base meanwhile remains moderate in the 4-5% range, confirming that the base trade is currently unattractive.
- In the options sector, we see a shift towards neutral to bearish sentiment in the near term, despite maintaining a positive structural bias. The term structure of implied volatility (IV) continues to show short-term backwardation before moving into long-term contango.
- While the 1-week delta skew of 25 remains positive at 8%, indicating that a premium is still being paid for short-term calls, this belief is challenged by 24-hour put/call volume, which fell from 56% to 43% in favor of puts, suggesting that short-term downside hedging or speculation is currently dominating trading activity.
- Data from Coinglass shows $879 million in liquidations over 24 hours, with an 86-14 split between long and short positions. BTC ($303 million), ETH ($193 million) and others ($79 million) were the leaders in terms of notional liquidations. The Binance liquidation heatmap shows $111,000 as the base liquidation level to watch, in case of a price rally.
Symbolic discussion
By Olivier Knight
- Altcoin market heads into the weekend with less than a week ago, along with ether losing 1.3% to $3,840.
- Many tokens broke key support levels during the period, pushing the average lower. The CoinDesk 80 Index, a measure of the smallest of the top 100 coins, fell 3.8% while the CoinDesk 20 fell 1.3%.
- Doublezero (2z), plasma door token (GT) and all fell between 15% and 21% after extending losses on Friday.
- A few tokens have bucked the trend, including the much-hyped privacy tokens. up 5% Friday to add to a weekly gain of 47%.
- The TRUMP memecoin also performed well after it emerged that the company behind the token was considering buying fundraising platform Republic. TRUMP is up 35% in the last seven days.
- The altcoin market outlook now depends on whether ether can hold on to its current support level at $3,700, an area that provided three rebounds in October.
- A break below this level would indicate weakness and a potential macroeconomic trend reversal, which is likely to be reflected across the entire altcoin market.
