The cryptocurrency market continued to show weakness Tuesday morning, generally following a tech sell-off in U.S. stocks and a correction in precious metals prices.
Bitcoin is trading at $68,000, down 1.25% since midnight UTC, while Nasdaq and gold futures lost 0.55% and 2.4% respectively over the same period.
Altcoins also lost ground, as popular memecoins PEPE, DOGE and TRUMP led the decline, losing between 3.5% and 4.5%.
The technology sell-off has been driven by fears around artificial intelligence and how it could affect various industries. Bitcoin has been closely tied to the Nasdaq since February 3, with the correlation coefficient indicator rising from negative 0.68 to positive 0.72 over the past two weeks.
Meanwhile, gold is currently trading at $4,928 after failing to establish a support level above $5,000. The precious metal hit an all-time high of $5,600 on January 28 before a historic 21.5% correction over the following four days.
Derivatives positioning
- Cryptocurrency futures continue to experience capital outflows. Industry-wide cumulative notional open interest has declined 1.5% to $93 billion in 24 hours, hitting new multi-month lows.
- Exchanges have liquidated $229 billion worth of leveraged bets over 24 hours, with long positions (bullish plays) accounting for the majority of the total.
- Open interest in DOGE futures has decreased by 4%, leading the trend in most major companies. PEPE, LINK, and AVAX have all seen drops of 3% to 5% in open interest.
- Open interest in HYPE-linked futures, the recent top performer, has cooled to 44.45 million HYPE, the lowest level since early December. This likely reflects profit-taking after the token outperformed Bitcoin and other majors during the recent crash.
- Market panic has subsided, as evidenced by the sharp pullback of the bitcoin and ether implied volatility indices from their monthly highs.
- On Deribit, bitcoin and ether put options continue to trade higher than call options, indicating persistent bearish fears; However, the positioning is now as defensive as it was two weeks ago.
symbolic talk
- Altcoins continue to follow Bitcoin as the “Bitcoin dominance” metric has now ranged between 57.4% and 60.1% since September.
- In the last seven days, the AI token MORPHO has recorded a gain of 23.5%, while the privacy coin zcash has increased by 19% during the same period.
- In contrast, layer 1 blockchain token zero layer (ZRO) has lost 16% over the past week as it continues to lose momentum after announcing a deal to collaborate with Citadel Securities and DTCC.
- The relative weakness of several altcoins continues to persist on shorter time frames, with HYPE, SUI, and ASTER losing between 3% and 4.8% since midnight UTC as the cryptocurrency market awaits a bullish catalyst.
