bitcoin Although it is slightly green, it may suffer a surprise. The largest cryptocurrency has gained less than 0.5% since midnight UTC, and strong moves towards $80,000 are likely to meet opposition.
This is because short-term holders have a cost base around that price, Luke Deans, senior research associate at Bitwise, told CoinDesk. An upward move may convince them to take profits and sell, limiting any advances.
Another hurdle may come in the form of March PCE inflation in the United States, which lands as oil prices maintain pressure on risk assets. West Texas Intermediate crude oil has risen to $110, and reduced traffic through the Strait of Hormuz has kept energy markets fragile.
The Federal Reserve’s decision Wednesday to hold the federal funds rate steady is also weighing on the market. Specifically, a whopping four dissenting voices, the most since 1992, with one governor pushing for a cut and three regional presidents opposing the statement’s suggestion that the Fed would resume easing.
Deans also said that altcoins remain tied to bitcoin, with the 180-day correlation and beta percentiles near 97% and 99%. That means the tokens can move today like leveraged bitcoin trades.
“Below the surface, conditions typically associated with increasing volatility appear to be forming,” Deans said. “Liquidity remains subdued, with profit and loss taking largely offsetting each other, reflecting a lack of directional conviction.”
In these environments, he said, price movements are often needed to unlock new liquidity.
Derivatives positioning
- Across the market, futures open interest (OI) has fallen more than 2% to $119 billion in 24 hours. Trading volumes, however, have increased by 26% to $208 billion. The combination indicates that positions are being closed and capital is fleeing the market, a sign of risk aversion.
- Exchanges have liquidated more than $500 million in leveraged bets, most of which are long or bullish positions. Market weakness amid rising bond yields has clearly caught bulls off guard.
- OI has fallen 2% in bitcoin futures and 1.7% in ether. Similar declines are seen in most major companies except DOGE, whose OI is still hovering around six-month highs.
- With the exception of XMR, In short, sellers are being more aggressive, suggesting the possibility of deeper price declines.
- Bitcoin’s 30-day implied volatility index, BVIV, has fallen to 41%, extending the decline from February’s high of 97%. Right now, the index is at its lowest level since January 29. Once again, this tells the story of a market that has become desensitized to adverse macroeconomic developments, such as rising bond yields and elevated oil prices. Ether’s volatility index shows a similar pattern.
- On Deribit, protective puts on BTC and ETH remain more expensive relative to calls. The large concentration of open interest in bitcoin’s $80,000 call option has created long (positive) gamma momentum, suggesting that market makers can sell rallies to and above that level to cover their books. This could stop possible rallies.
- The term structure of Bitcoin options shows less short-term stress, and traders value more uncertainty in the future than in the immediate future.
- Block flows featured a large BTC sell spread involving strikes of $72,000 and $65,000, according to Amberdata. The strategy shows expectations of a further price drop to $65,000 or less.
symbolic talk
- Memecoin launchpad Pump.fun is adding a way for creators to send fees to charities as its PUMP token trades lower following a major change to its revenue policy.
- The feature, called Charity Coins, allows coin managers to choose a verified charity within Pump.fun’s creator fee settings. The platform that leverages it, Donate.gg, supports more than 10,000 charities.
- The goal is to reduce disputes between traders and coin managers when a token is formed around a charitable cause. The platform’s current top fundraiser is currently $12,800 for St. Jude Children’s Research Hospital.
- Pump.fun also said it will stop using all proceeds to buy and burn PUMP. Instead, it will now send 50% of future net revenue to buybacks and automatic burns for one year, while keeping the rest for recruiting, product work, marketing, and potential deals.
- The changes come during a difficult stretch for PUMP. The token is down more than 7% in the last 24 hours, compared to a 2.2% drop in the broader CoinDesk 20 index (CD20).
