The crypto market remains under pressure ahead of crucial US inflation data, which is expected to show the cost of living hit a three-year high of more than 4% in May.
Tokens such as privacy-focused zcash (ZEC) and Hyperliquid’s decentralized exchange HYPE each fell more than 10% in 24 hours, a signal of risk aversion in the broader market. ADA, ONDO, BCH are other losers, down more than 4%. The CoinDesk 20 Index fell 3% over the period.
Bitcoin fell back to below $61,500, nearly reversing Sunday’s rebound that saw prices surpass $64,000 on some exchanges. More importantly, the cryptocurrency is trading below its 200-week simple moving average (SMA), a technical line widely watched by traders.
“The history of the 200-week moving average over the past 11 years (prior to that, the market had not fallen below this average) shows that the average time spent near this average is almost 11 months, suggesting a very long bear market,” Alex Kuptsikevich, chief market analyst at FxPro, said in an email.
Positioning of derivative products
- Crypto futures volume over the past 24 hours increased 1.2% to $193 billion, while open interest fell 1.5% to $102.27 billion. In contrast, liquidations jumped 38% to $418 million, with long positions accounting for more than $300 million of the total as bitcoin fell back towards $61,000 yesterday.
- Bitcoin futures’ open interest (OI) increased from 712,000 BTC to 728,000 BTC, even as the cryptocurrency’s price fell. Rising OI in a price decline indicates new short positioning, a sign that traders are positioning for further decline.
- This conclusion is reinforced by negative perpetual funding rates and a negative 24-hour cumulative volume delta adjusted for OI, the latter indicating that sellers are hitting market bids rather than placing passive limit orders.
- Solana OI futures rose to 69.58 million tokens, up nearly 2% on the day, closing in on June 5’s all-time high of 71.57 million. Funding rates and CVDs are negative, reflecting Bitcoin’s bearish pattern.
- The bearish tilt extends across all levels. Funding rates and CVDs are negative for most major coins, including Ether (ETH) and XRP. The only exception is XMR, whose 24-hour CVD is narrowly positive.
- Bitcoin’s 30-day implied volatility index is 51.21%, up from 45.8% on Monday, reflecting renewed uncertainty ahead of the US CPI release later today. The ETH Implied Volatility Index also increased.
- On Deribit, short-term puts on BTC and ETH continue to command a notable premium over calls, a sign that demand for downside hedging remains high. One-week implied volatility trades cheaply relative to one-week realized volatility, a setup that favors options buyers.
- In block flows, a long butterfly was structured at the July 31 expiration, involving long positions in the $70,000 and $80,000 strike price calls and 2x short positions in the $75,000 call. Trading profits if BTC consolidates around $75,000 through the end of July, implying the desk behind the position sees limited directional conviction from here.
Symbolic discussion
- The total value locked (TVL) of Uniswap V4, deposits contained within a protocol, appeared to explode by over 350% in a day, with DefiLlama showing around $2 billion in apparent inflows concentrated on the BNB chain. The jump was large enough to look like a major migration of liquidity into the stock market.
- However, this was not the case. This figure does not represent a wave of capital flowing into the protocol. CoinDesk traced the spike to Humanity Protocol’s H token, which was hacked and created in unlimited supply a day earlier. The new worthless tokens were in a BNB chain pool and inflated the dollar value of the dashboard rather than representing actual deposits. The founder of DefiLlama has been contacted for confirmation.
- Santiment, a behavioral analytics platform, said the market sell-off has reached a historic buying zone.
- The 30-day market value to realized value (MVRV), a measure of average profit or loss for traders who purchased a token in the past month, shows the typical recent buyer underwater for bitcoin by 10%, ether by 12%, chainlink by 9%, XRP by 8% and cardano by about 18%. The company calls the first four a “fair buy” and Cardano a “strong buy.”
- surged 12% in 24 hours after the on-chain lending protocol raised $175 million, one of the largest funding rounds in DeFi history, co-led by Paradigm, a16z crypto and Ribbit Capital with backers including Apollo and VanEck.
- The deal, structured as a token purchase, valued the protocol at up to $2 billion. The token then returned some of the pop.
