Volatility returned to cryptocurrency markets on Monday as bitcoin it soared as high as $79,480 before quickly retreating to $77,800.
The move began around 23:00 UTC with the opening of CME bitcoin futures and US stocks, a period that often sees increased volatility.
At 05:30 UTC, the price began to fall after failing to break above the $80,000 level, falling 2% in an hour.
The drop came as oil hit its highest level since the ceasefire between the United States and Iran began. Brent crude is trading at $107 a barrel after US President Donald Trump canceled plans to send US officials to talks in Pakistan on Saturday.
Ether (ETH) recently traded around $2,320 after losing 2.2% since midnight UTC, underperforming Bitcoin, which is down 1.1% but has not fallen as precipitously as several altcoins.
Derivatives positioning
- Almost $300 million in crypto futures bets have been settled in the last 24 hours. Most of these have been bearish short plays, which likely faced the brunt of the cryptocurrency’s brief rally to nearly $79,500.
- Open interest (OI) in XRP futures increased by almost 2.5% in 24 hours. This is the largest increase among major tokens including bitcoin, ether, and solana (SOL). OI hit a one-week high of 1.82 billion XRP along with negative perpetual futures funding rates and an OI-adjusted cumulative volume delta. This combination paints a bearish picture, consistent with the bitcoin and ether markets.
- However, analysts said the persistent negative funding rates in BTC are primarily due to institutions hedging their bullish exposure in related markets and not representing an overtly bearish bet on the market.
- HBAR, CC, XLM and HYPE are other notable OI gainers in the last 24 hours.
- SUI records the most negative CVD, suggesting sustained aggressive selling through market orders. A Sui-based DeFi protocol called Scallop was hacked earlier today, with the perpetrators making off with approximately 150,000 SUI tokens valued at just over $140,000.
- Bitcoin and Ethereum’s 30-day implied volatility indices extended their declines, painting a picture of calm in the market that supports continued price rallies in the two assets. This is consistent with the recent decline in Wall Street’s VIX index, a gauge of the S&P 500 index, and all-time highs in other key measures, including the Nasdaq.
- On Deribit, bitcoin and ether options continue to show a bias towards puts on all time frames. Ether options expiring in December and next March are notably less bearish than their bitcoin counterparts.
- The $80,000 Bitcoin strike call option is the most popular on Deribit and has a notional open interest of over $1.5 billion. The dealers’ gamma here is positive, implying that dealers (market makers) could sell on a potential breakout above this level and similarly buy on the dip, halting price volatility.
- Speaking of flows, Laser Digital said investors are favoring risk reversals over straight puts. This means that traders prefer options strategies that benefit from price swings and differences in how options are priced at different strike levels.
symbolic talk
- While the overall market was volatile on Monday, the altcoin sector was the hardest hit during the 05:30 UTC sell-off.
- Liquid recovery token Lido (LDO) led the losses, giving back all of Sunday’s gains to fall around 17%.
- The bitcoin-heavy CoinDesk 20 Index (CD20) is down 1.5% since midnight UTC, while the DeFi Select Index (DFX) has lost 2.3%, and only the Smart Contract Platform Select Index (SCPX) has performed worse, down 2.5%.
- A handful of tokens managed to avoid liquidation, notably PENGU, JUP, and CHZ, which rose 9.1%, 4%, and 3.1%, respectively.
- CoinMarketCap’s “Altcoin Season” indicator sits at a neutral level of 39/100, unchanged from last week and well below last month’s high of 51/100.
