The cryptocurrency market experienced a rare period of volatility during Asian time on Monday, with bitcoin falling over 5% to $64,270 shortly after midnight UTC before recovering to $66,300 at 11:00 UTC.
The sell-off and subsequent rebound mirrored the action in US stocks. Futures tracking the S&P 500 index fell 0.84% after opening Sunday night before beginning to recover five hours later.
Gold futures did the opposite, rising at the Sunday afternoon open to hit their highest level since Jan. 30 before giving up some of those gains during European time. Silver followed the most expensive metal.
The rise in precious metals along with the weak performance of risk assets comes after US President Donald Trump said he planned to impose new 15% global tariffs on his trading partners and the increased US military presence near Iran fueled a rush to safe-haven assets.
Altcoins succumbed to low liquidity conditions overnight when solana (SOL) and fell 7% to 8% before both recovered in European time, a move that led to $270 million worth of altcoin liquidations, according to CoinGlass.
Derivatives positioning
- Demand for leveraged products remains tepid, as evidenced by total crypto futures open interest remaining below $100 billion for over two weeks.
- Liquidations don’t help either. In the last 24 hours, exchanges have forcibly closed $500 million worth of crypto futures bets due to tight margins.
- Traders continue to invest capital in futures linked to tokens associated with traditional assets such as gold. For example, open interest in Tether gold futures (XAUT) has increased 14% in 24 hours, even as BTC, ETH, SOL, HYPE, DOGE and others continue to experience capital outflows.
- ZEC and CRO are the only tokens that feature a positive 24-hour cumulative volume delta (CVD), a sign of buyer dominance. Meanwhile, BTC and other large companies have negative CVDs, a sign that selling pressure is taking over buyers.
- Bitcoin’s 30-day implied volatility index, BVIV, has risen 9% to over 60%, indicating renewed nervousness.
- Traders looked for bitcoin put options at the $58,000, $60,000, and $62,000 levels as Trump’s new tariffs injected new uncertainty into the market.
- On Deribit, bitcoin and ether call options trade at a premium to call options on all time frames, indicating persistent bearish fears.
symbolic talk
- The altcoin market remains in the red on Monday after weakness in bitcoin and US stocks triggered an exaggerated sell-off.
- Low liquidity conditions led pump.fun’s native PUMP token to lose 8.5% of its value before making a bounce, while layer zero (ZRO) began selling off early on Sunday, losing 16.5% in 24 hours before recovering at 04:00 UTC.
- A small number of tokens outperformed the broader market. Recovery token ETHFI is up more than 10% from Monday morning’s low.
- Telegram-pegged Toncoin (TON) showed more stability overnight, falling just 3.6% before rebounding 4.9%.
- CoinDesk’s DeFi Select Index (DFX) was the best-performing benchmark index over the past 24 hours, losing just 1.84%, while the CoinDesk Smart Contract Platform Select Index and CoinDesk Computing Select Index lost 3.56% and 3.23%, respectively.
- The altcoin market has largely been following Bitcoin throughout February, albeit with a lack of liquidity leading to exaggerated moves. If bitcoin can hit a local low and recover above $70,000, for example, several altcoins are poised for a prolonged rally after order books were cleared in early February.
