bitcoin was little changed on Wednesday after gaining yesterday as the dollar weakened. Ether gave up some of his earnings.
Instead, advances came from other parts of the altcoin market. Hyperliquid’s native HYPE token extended gains, adding 11% since midnight UTC, and Solana’s liquid staking token surged 32%, its biggest one-day gain since December 2023, according to data from CoinDesk.
The dollar index (DXY) fell to a four-year low on Tuesday, fundamentally below a trend line dating back to 2011, despite an attempt by President Donald Trump to reassure markets that the dollar is “doing very well” and that he is not “worried.”
The strength or weakness of the dollar has a direct impact on the cryptocurrency market because most assets are traded against the US currency. Inverse correlation was a key talking point in the previous bear market, when the dollar rose 22% between November 2021 and October 2022, while bitcoin lost more than 70% of its value.
Derivatives positioning
- Another $230 million in leveraged bullish crypto futures positions were liquidated in the last 24 hours, extending the trend of consistent liquidations in long positions since Monday.
- Bitcoin and Ethereum’s 30-day and one-day implied volatility indices remain under pressure, a sign that traders are not expecting major turbulence even as the Federal Reserve’s interest rate decision looms.
- Notional open interest (OI) in futures linked to the HYPE token has increased by more than 20% in dollar terms in 24 hours. This largely reflects the price gains of the token, because in symbolic terms it remains practically unchanged near 57 million HYPE.
- The OI in BTC, ETH, XRP and BNB has increased by 2% to 4%.
- Except for ZEC and TRX, the annualized financing rates of major companies remain positive, indicating a bias towards bullish positioning.
- On Deribit, BTC and ETH put options continue to trade at a premium to call options. Activity has picked up in BTC put options at the $85,000 strike level, indicating demand for short coverings.
- Block flows into BTC have been mixed, with traders chasing both put and put spreads. In the case of ETH, combinations and risk reversals were demanded.
symbolic talk
- While HYPE and JTO are among the top performers on Wednesday, the biggest altcoin gain is for PIPPIN, a Solana-based memecoin and autonomous AI agent created by AI innovator Yohei Nakajima.
- PIPPIN is up 64% in the last 24 hours and is the most purchased token by “smart money” investors, according to Stalkchain.
- Decentralized exchange tokens and aster also embarked on bullish moves, with the former rising 3.11% since midnight UTC to post a 24-hour gain of 10.9%, while ASTER is trading at $0.69 after being up 5.7% since Tuesday morning.
- CoinDesk’s indices also indicate altcoin strength: the bitcoin-dominant CoinDesk 20 (CD20) index is up 2.47% in the past 24 hours and 2.38% since the turn of the year, while the altcoin-heavy CoinDesk 80 (CD80) has outperformed its counterpart with a 3.7% 24-hour gain and a 7.3% rise. since January 1st.
- The bullish mood across the altcoin sector comes as bitcoin remains stuck in a tight trading range, historically a bullish period for altcoins because capital is often rotated into more speculative bets until bitcoin makes a decisive move one way or the other.
