The cryptocurrency market compounded a negative week with a continued decline on Friday. bitcoin fell to $100,600 and ether is languishing at $3,270.
The move appears to be in line with the broader crypto market trend of late, which has seen BTC lose 18% of its value in the last 30 days. Both the CoinDesk 5 Index (CD5) of the largest and most active tokens and the broader CoinDesk 20 Index (CD20) have lost around 3% in the last 24 hours.
The fallout can still be attributed to comments from the Federal Reserve earlier in the week that suggested a possible cooling of the rate cut cycle, causing the US dollar to rise and risk assets to fall.
The altcoin market, with the exception of AI tokens, is performing worse than bitcoin, with the “altcoin season” index at 22/100, its lowest level in over 90 days.
Derivatives positioning
By Saksham Diwan
- The BTC futures market continues to reflect caution and little conviction.
- Open interest (OI) is showing a slow but steady downward trend, settling at $24.91 billion. That’s down from $26 billion last week, an indication that traders are reducing leverage.
- The three-month annualized basis is low at 3% to 4%, and funding rates are below 10% annualized on major exchanges.
- Deleveraging and derivatives suppression metrics reinforce an overall low profitability environment and a lack of strong directional commitment from the futures side.
- The BTC options market, on the other hand, is showing mixed but strongly bullish signals.
- Despite the short-term pullback in the term structure of implied volatility (IV), which indicates short-term volatility, the trading bias is decidedly bullish.
- This is confirmed by the 24-hour buy/sell volume tilting between 64% and 35% in favor of calls and the 25-week delta bias remaining at 10%, meaning traders are paying a clear premium for upside exposure in the very short term.
- The drop in Bitcoin price caused liquidations of $601 million in the last 24 hours, with 65% of the losses falling on long positions, confirming the impact of forced selling. Crucially, with the current BTC price around $101,000, the $100,000 psychological level is now strengthened by multiple long $30 million liquidation walls, positioning it as a strong support level that will likely be defended aggressively by the market.
symbolic talk
By Oliver Knight
- The altcoin market faced more downward pressure on Friday, led by a 5% drop in and a 3.5% drop for ether .
- Both tokens are now approaching critical support levels that provided short-term relief on November 4. A break below these levels would indicate a continuation to the downside.
- CoinMarketCap’s “altcoin season” index is at 22/100, its lowest level in over 90 days, as traders dump illiquid tokens ahead of a potential liquidation.
- Last month’s leverage-inspired shortening introduced several vulnerabilities in altcoin order books, particularly how a lack of rest limit orders can cause dramatic spikes when volatility increases, subsequently triggering a wave of sell-offs on derivatives exchanges.
- Another metric that may worry the bulls is that the average Relative Strength Index (RSI) indicator is at 49.52/100, and is no longer oversold as it was earlier this week. This means that the market is now neutral and is no longer likely to rebound.
- However, the altcoin market is clinging to a ray of hope heading into the weekend: the artificial intelligence sector is booming.
- FET is up 23% in the last 24 hours and NEAR is close behind with a 22% gain. The volume profiles of both tokens suggest retail participation, with significant flows into Binance and Kucoin.
