The crypto market is experiencing a rare period of calm following Tuesday’s massive sell-off that swept away bitcoin. and ether to new multi-year lows.
BTC was recently trading at $76,100 after rebounding from $72,870, the lowest since November 2024, while ETH is at $2,255 after falling to a level not seen since May last year. Both assets have been in the dark since midnight UTC, if only just.
The altcoin market is mixed, with privacy coins embarking on a much-needed rebound while Solana-based tokens like PUMP and JUP have fallen, losing 2% and 2.5% respectively since midnight.
The rally came after the U.S. House of Representatives passed a government funding plan to end a partial shutdown, helping revive U.S. stock futures and other global markets. Precious metals rebounded, with gold climbing back above $5,000 and silver at $90 rising nearly 6%.
Positioning of derivative products
- Traders continue to reduce their risk exposure, bringing the cumulative notional open interest across all crypto futures contracts to $105.90 billion, the lowest since last April.
- Crypto futures bets worth $679 million were liquidated within 24 hours, with bullish plays accounting for the majority of the total.
- Bitcoin’s 30-day implied volatility has reached an annualized rate of 53%, the highest since December 1, indicating increased market fear.
- Open interest (OI) on Bitcoin and Ether futures fell 0.7% and 2%, respectively. DOGE and recent outperformer HYPE have seen larger capital outflows.
- OI on LINK futures increased by 2% alongside a positive cumulative volume delta. The combination indicates an influx of bullish pressure in the market. The 24-hour CVD is also positive for TRX, XLM and ZEC.
- Options listed on Deribit still display a bias towards puts on Bitcoin and Ether, a sign of continued demand for downside protection. Short-term puts trade at a 10-12 volatility premium over calls, a sign of maximum fear.
- Block flows included demand for bitcoin and ether sell spreads, a bearish strategy.
Symbolic discussion
- Derivatives exchange tokens HYPE, LIT and ASTER all fell in the past 24 hours as traders returned to privacy coins.
- HYPE has lost 8.5%, but remains up 30% since the start of the year.
- Monero rebounded by 4% to stop the bleeding after having lost more than 50% of its value since January 14. Zcash is up 3.4% after falling more than 62% from its November record.
- Generally speaking, the altcoin market lost ground to bitcoin during the recent market plunge. Bitcoin dominance is now back above 59% after starting the year at 58.5%.
- The divergence is typical of previous crypto bear markets, characterized by exaggerated altcoin moves in low liquidity environments.
- Crypto majors SOL, ADA and XRP are all trading at their lowest levels since 2024, having retraced the entirety of bull rallies over the past few years.
