The crypto market fell a day after the Federal Reserve expressed expectations that US interest rates would rise.
Bitcoin the largest cryptocurrency by market capitalization, was changing hands at nearly $63,900, down more than 1% in the past 24 hours. Other major tokens including XRP (XRP), ether (ETH), BNB coin and solana (SOL), recorded similar losses.
The CoinDesk 20 Index (CD20) fell more than 1.2% during the same period. The DeFi Select Index (DFX) slipped 5%, the largest decline among all CoinDesk benchmarks.
Yet there were pockets of strength. For example, Provenance Blockchain’s HASH token jumped 15%, alongside a nearly 10% gain in Stellar’s lumen (XLM).
“Sentiment is wiped out, the Fear Indicator has plunged into extreme fear and BTC is now about 48% off its high of $126,000 from last October. Contrarian fuel if you have patience, but a clear indication that positioning is defensive and conviction is thin,” Marex analysts said.
Positioning of derivative products
- Crypto futures bets worth over $440 million have been liquidated on exchanges in the past 24 hours. Most were bullish long positions, indicating traders had positioned themselves for a recovery following Wednesday’s Federal Reserve interest rate decision.
- BTC futures open interest (OI) returned to 730,000 BTC from Tuesday’s high of 742,000 BTC, signaling renewed risk aversion. The same applies to the OI of the ether.
- XRP’s OI is hovering at 2.30 billion tokens, the highest level since October, surpassing the recent high of 2.29 billion tokens. This is not necessarily bullish as perpetual funding rates and 24-hour cumulative volume delta (CVD) are negative, indicating bearish dominance in the market.
- Generally speaking, most of the top 25 tokens, excluding TRX and SOL, recorded a negative 24-hour CVD, a sign that bears are aggressively striking market orders rather than placing passive limit orders.
- Against this backdrop, the 30-day annualized implied volatility indices for bitcoin and ether continue to signal calm. Bitcoin’s BVIV index is hovering around 41%, having reversed a peak from earlier this month near 59%.
- In the options market, feeds tracked by Laevitas show increased demand for puts expiring on June 21, a clear indication that traders are looking for protection against downside volatility heading into the weekend.
Symbolic discussion
- Hyperliquid’s token continues to rise higher, but its enforcement layer does not. HYPE is up 34% for the week and its main perpetual exchange is seeing record volume, but HyperEVM, the general-purpose layer intended to attract external developers, has not produced a breakthrough application.
- A criticism circulating in the Hyperliquide community claims that the manufacturer side is at a standstill, pointing to projects that have been stopped or losing momentum and activity concentrated in just a few hands.
- The data confirms the gap. HyperEVM holds approximately $1.5 billion in total value locked (TVL), money parked in its applications, compared to more than $5 billion in daily volume of the main exchange. More than 175 teams have been deployed, but few of them have any real influence.
- The traction that exists is concentrated. Unit is the lead deployer of HIP-3 Markets, Hyperliquide’s permissionless system for listing new perpetuals, and Kinetiq is a leader in liquid staking. Relying on one or two manufacturers is risky, in case one or the other backs out.
- The dissuasive measures appear structural. Builders are hesitant because a winning idea can simply be built by Hyperliquid itself, and an app that likely won’t reward early adopters with an airdrop and might not survive the year gives traders little reason to lock up capital in it.
- The tension is that Hyperliquid says it is important to attract builders. The token and trading engine are among the most powerful in crypto, while the layer intended to expand the ecosystem has yet to find its breakthrough moment like Solana or Ethereum have.
