bitcoin recovered 0.7% on Wednesday, but remains at a crucial crossroads after a 9.5% drop since Sunday.
The largest cryptocurrency recently traded near $67,000, firmly in the middle of a range that persisted between February and April after a failed breakout attempt above $81,000 last month.
If bitcoin falls below $60,000, it would likely trigger a wave of sell-offs and a possible drop to $54,000, a support level that dates back to 2024 and 2021.
Meanwhile, Ether (ETH) is trading at $1,870 after rising 0.9% since midnight UTC, although the rebound comes after a sell-off that saw it fall to its lowest point since February.
The US stock market hit all-time highs again on Tuesday. The divergence is starting to raise concerns among some cryptocurrency investors because the two asset classes have historically moved in tandem.
AI crypto tokens continued to outperform their peers. NEAR, RENDER and FET rose around 9% on Wednesday following Tuesday’s broad market sell-off.
Derivatives positioning
- More than $1.7 billion in leveraged crypto futures bets were settled in the last 24 hours, double the amount from the previous day.
- Most of the liquidations were bullish long positions after BTC fell to $65,500 today. 24-hour volume rose 27% to nearly $300 million, while industry-wide cumulative notional open interest (OI) fell just over 2%.
- The combination of large sell-offs and falling open interest suggests an aggressive shift out of leveraged bull plays and a reduction in new leveraged exposure.
- Open interest in bitcoin futures is at record levels above 800,000 BTC, for the third day in a row even as spot prices decline. That validates the bearish trend and points to an influx of new shorts or bearish positioning.
- The seven-day OI-adjusted cumulative volume delta is negative, indicating that the bears are leading the price action by actively selling with market orders instead of using passive limit orders.
- Most major tokens including ETH, ADA, SUI, XRP, and SOL are also showing negative seven-day and 24-hour cumulative volume deltas, indicating bearish leadership across all markets. The funding rates for these tokens remain slightly positive to slightly negative, implying that the bear side is not overcrowded and there is room for further downside.
- However, open interest in ZEC futures has increased for the third day in a row to 2.43 million ZEC as the token has gained 6.3% in seven days, countering the overall malaise. ZEC is also showing a positive 24-hour CVD along with HYPE, indicating bullish sentiment.
- Fear is appearing again. The BTC and ETH 30-day implied volatility indices (BVIV and EVIV) rose sharply on Tuesday, posting their biggest single-day gains since the Feb. 5 crash. Continued increases in the measure could portend further trouble for the market.
- Options flow on Deribit shows traders paying for downside protection. The one-week put options bias rose to nearly 20% early today, reflecting huge demand for puts. The most traded instruments in the last 24 hours were the $70k put option that expired on June 5 and the $55k put option that expired on June 26.
- In block flows, BTC buy spreads and ETH sell spreads were the most favored bets.
symbolic talk
- Ethena (ENA) is one of Wednesday’s top-performing altcoins, up 9.3% since midnight UTC and more than 20% in 24 hours after Coinbase (COIN) said it will integrate Ethena features into a new savings account product.
- There was a notable gain for the zcash privacy coin (ZEC). The token is up 2% since midnight and 12% in the last 24 hours as it tries to move away from danger.
- CoinMarketCap’s “Altcoin Season” indicator is now at 53/100, the highest since early March, as investor appetite for high-risk altcoins remains despite weakness among major cryptocurrencies.
- Humanity Protocol (H) appears to be entering a corrective phase after it lost a quarter of its value in 24 hours following a 200% rally last week, with clear profit-taking. Daily trading volume fell 55% to $314 million.
