Cryptocurrency markets are exhausted after a wave of relentless selling pressure on Tuesday. Some assets have now started to establish support levels and have settled, but if the USD continues to show strength, it could signal an extended period of downside.
Bitcoin After two days of decline, at one point dropping to its lowest level since June, it rose about 1% from midnight Coordinated Universal Time (UTC). ether It fell more than 20% in 48 hours, its biggest drop in three months, but it rose another 2%.
The CoinDesk 20 index, the largest cryptocurrency index, is down 2.5% in 24 hours, roughly mirroring yesterday’s movements. It is up 2.2% since midnight UTC and has just one component. is low.
The altcoin market is faring worse than Bitcoin, which continues to cling to the $99,000 support level.
Several tokens are now retracing their entire rally since July, suggesting that the brief “altcoin season” is over and focus is shifting back to BTC and whether BTC can weather this recent storm.
Positioning of derivatives
Written by Saksham Diwan
- BTC futures markets are reflecting heightened caution. Open interest (OI) fell to $25.3 billion from $26 billion last week, suggesting traders are reducing leverage. When compared to the year-over-year increase in BTC prices, this decline indicates that the relative amount of leverage in the market has not kept pace with the rise in asset values.
- The three-month annualized basis is limited to 3%-4%, indicating that basis trading is currently unattractive. Funding rates have been mixed but low across major venues (4%-9% p.a.), reinforcing the lack of strong trend commitment and overall market caution from the futures side.
- The Bitcoin options market is showing a variety of volatile signals.
- Implied volatility (IV) is high across all maturities, indicating an increase in short-term volatility expectations. Structurally, the stage IV structure exhibits a short-term backwardation (downhill) before resuming a long-term contango (uphill).
- Despite this volatility, the recent trading bias has returned to a bullish trend, with 24-hour put-call volume leaning between 58% and 42% in favor of calls, indicating aggressive upside.
- The recent price decline has been heavily influenced by unwinding leverage, with $1.7 billion liquidations in the past 24 hours favoring long positions 76% to 24%. ETH led the way in notional loss with $572 million liquidated.
- Importantly, the $1 billion average of long liquidations over the past two days is significantly higher than the seven-day average of $620 million, confirming the growing influence of forced selling on current price action.
- Looking ahead, the key price level of $102,500 has the potential for $124 million in liquidations, and any rebound may face some resistance for some time.
token talk
Written by Oliver Knight
- The altcoin market remains in oversold territory following a heavy selloff on Tuesday that saw several tokens fall to multi-month lows.
- The average Cryptocurrency Relative Strength Index (RSI) is 38/100, while the print numbers for tokens including OKB, SKY, and FLR are around 23/100. This suggests that while the overall crypto market is bearish, a short-term rescue recovery may be expected.
- For Bitcoin, bounce suggestions are disabled. and ether Below the respective support levels of $99,000 and $3,100.
- If BTC and ETH fall further, the situation for altcoins will worsen due to lack of liquidity and skewed leverage levels. This means that there are not enough buy orders in the altcoin’s order book to absorb the selling pressure and subsequent liquidation, resulting in a sharp rise in the downside price.
- Traders will be wondering whether the recent “altcoin season” is officially over, as most tokens, except for privacy coins, have eroded the bull run from July and August.
- While the privacy coin saga remains a major driver of the current market, DCR and ZEC fell on Wednesday, while XMR rose 7%, with the sector as a whole remaining up significantly over the past month.