bitcoin gave back a large chunk of its recent gains on Thursday, now trading at $66,700 after losing 2.4% of its value since midnight UTC.
Ether (ETH) performed even worse, falling 4.4% as the broader crypto market struggles to deal with continued risk-off sentiment.
The latest drop was fueled by US President Donald Trump, who said on Wednesday night that the war in Iran would continue with extensive strikes against Iran.
“Over the next two or three weeks, we will bring them back to the Stone Age where they belong,” he said.
The comments sparked an immediate surge in oil prices, with Brent crude rising around 10% to $108 a barrel as U.S. stocks diverged.
Nasdaq 100 and S&P 500 futures lost 1.5% and 1.1% respectively, while the US dollar rose 0.5% to exceed 100 points.
Derivatives positioning
- BTC price has fallen over 2% since midnight UTC along with a slight increase in open interest in major USD and USDT denominated futures. Additionally, perpetual funding rates have fallen to their most negative level since March 12. This combination suggests that traders are bearish and shorting the falling market.
- In the case of ether, funding rates are most negative since October last year, a sign of a strong bias towards bearish bets. Meanwhile, the downtrend for solana (SOL) is surprisingly more measured despite the overnight hack.
- Privacy-Centric Zcash (ZEC) and We have seen a notable drop in 24-hour open interest (OI), a sign of capital outflows.
- Nearly $400 million in futures positions have been liquidated due to margin shortfalls. That’s a 17% increase in losses compared to the previous day.
- Despite the renewed risk-off tone, bitcoin and ether 30-day implied volatility indices remain stable in recent ranges. Aim for orderly selling in the spot market rather than panic.
- There is little room for panic because traders are already positioned for the market crash. They have been constantly chasing bitcoin and ether puts (short hedges) since the beginning of the year. At the time of writing, bitcoin and ether put options remained more expensive than call options across all timeframes on Deribit.
- Block flows featured demand for ether, a volatility strategy, and bitcoin put spreads and buy spreads.
symbolic talk
- The worst-performing benchmark on Thursday was the CoinDesk DeFi Select Index (DFX), which lost 5.9% as of midnight UTC, closely followed by the CoinDesk Computing Select Index (CPUS) which fell 5%.
- Ethena (ENA) led the downward movement as it fell over 10% on Thursday, there was also a sharp drop among DeFi tokens UNI, LDO, SKY and AAVE, all losing between 4.2% and 6.5% during Asian and European hours on Thursday.
- Algorand (ALGO) bucked the market’s bearish trend, rising around 0.8% on Thursday as it continues its rich run of form after rising 22% last week.
- CoinMarketCap’s “altcoin season” index has fallen from 50/100 to 42/100 since March 30, highlighting relative weakness across the sector.
