The cryptocurrency market retreated on Thursday with bitcoin losing around 0.7% as of midnight UTC following Wednesday’s rally to a three-month high of $82,800.
Ether lost about 1% during Asian and European hours, now trading at $2,325 after briefly topping $2,420 on Wednesday.
The broader market is showing early signs of a bullish reversal following a two-month consolidation pattern between February and April, although it is worth noting that bitcoin needs to break above $98,000 to break its current cycle of lower highs and lower lows.
The altcoin market continues to indicate investor rotation, with ALGO and TON rising by 8% to 9% since midnight UTC.
US stock futures are steady on Thursday, while the dollar index (DXY) is down about 0.1% as investors remain hopeful for a deal to end the war in Iran.
Derivatives positioning
- Cryptocurrency futures market activity remained relatively subdued over the past 24 hours, with total futures volume increasing just 3% to $216 billion, while aggregate open interest (OI) declined 3% to $133 billion. The divergence between them suggests that positioning is narrowing rather than widening, pointing to deleveraging across the market.
- BTC open interest fell to 762,000 BTC from 793,000 BTC the previous day, ending a three-day streak of sustained positioning growth. Among major assets, DOGE recorded the steepest drop in OI, down 6%, while XRP OI fell about 1%. The falls in these assets suggest capital outflows and a lower speculative appetite in the short term.
- DOGE’s positioning seems particularly weak. Funding rates remain negative at an annualized rate of around 6%, indicating that shorts are paying longs to maintain exposure. At the same time, DOGE’s 24-hour cumulative volume delta (CVD) is the most negative among major tokens, indicating aggressive selling pressure from market participants using market orders.
- Meanwhile, BTC funding rates remain broadly neutral after averaging around -4% annualized in recent weeks. The normalization of funding suggests that excessive bearish positioning has largely been eliminated from the market. Some observers see this reset as constructive for BTC price action.
- In contrast, ETH and SOL posted OI increases of 1% or more despite weakening spot prices. Rising open interest coupled with falling prices generally suggests that new short positioning is entering the market, indicating that traders may be positioning themselves for additional downside in these tokens.
- TON continues to stand out on the positioning front. Open interest rose more than 10% to another all-time high, indicating continued capital inflows into the asset. TON price briefly hit $2.90 today, its highest level since September, and the token is up 93% on the week. The simultaneous increase in both price and OI points to strong directional involvement.
- TON, TRX, and ZEC are currently the only top 30 tokens posting OI-adjusted positive cumulative volume delta readings. This suggests that buyers are driving trading activity through aggressive market orders rather than passive limit bids. Most other major assets, including BTC, ETH, and XRP, continue to show negative CVD readings.
- In the options market, bullish sentiment remains evident on Deribit, where call options with strike levels above $80,000 continue to dominate the 24-hour volume rankings. According to Glassnode, traders with short gamma exposure can buy a potential BTC move above $82,000 to maintain hedges. That could increase momentum even further.
- Meanwhile, the one-month volatility risk premium, which measures the gap between implied volatility (IV) and realized volatility (RV), has returned to positive, according to Glassnode. This shift indicates renewed demand for short-term optionality and suggests that traders are increasingly willing to pay for short-term volatility exposure after a prolonged period of compressed expectations.
symbolic talk
- The CoinDesk DeFi Select Index (DFX) and the CoinDesk MemeCoin Select Index (CDMEME) are the best-performing benchmarks on Thursday, rising 2.5% each as speculative trading begins to take effect.
- The Bitcoin-weighted CoinDesk 5 (CD5) and CoinDesk 20 (CD20) indices are stable as of midnight UTC, while the broader CoinDesk 100 (CD100) was also marginally in the red.
- CoinMarketCap’s “altcoin season” indicator is now at 45/100, its highest level since late March, having risen from 32/100 since this time last month.
- Even though the overall altcoin market is bullish, the popular DeFi token MORPHO lost 4.6% of its value since midnight UTC and 6.1% in the last 24 hours. It is currently trading at $2.13 and investors are taking profits after a rally earlier in the week that took it from $1.95 to $2.33.
