The crypto market succumbed on Thursday to a wave of selling pressure and liquidations, with bitcoin falling to around $61,300 at 02:00 UTC before recovering to $64,680. It recently traded around $62,500.
Ether (ETH) lost 3% since midnight UTC and is now trading at around $1,750. Several other altcoins saw deeper declines, with NEAR, ZEC, and JUP losing more than 13%.
The downward move triggered a wave of liquidations with $1.7 billion worth of futures positions being forcibly closed due to the drop, of which $750 million can be attributed to bitcoin and $390 million to ether.
Investors appear to be abandoning cryptocurrencies to follow the AI narrative in traditional markets, exacerbating geopolitical uncertainty and a fundamentally broken market structure that has failed to recover from October’s deleveraging.
Derivatives positioning
- Total 24-hour futures volume rose 2.9% to $305 billion, an increase reflecting elevated but not panicked activity. More telling is open interest, which decreased 8.5% to $111.4 billion, a sign that leveraged positions are unwinding rather than adding new bets.
- The liquidations have been severe: approximately $3 billion in leveraged positions have been wiped out in the last two days, and the 24-hour tally alone reached $1.7 billion.
- Bitcoin open interest has retreated to 766,000 BTC from yesterday’s all-time highs above 800,000 BTC. The drop suggests that the price decline has eliminated a significant portion of leveraged long positions and that bears are not aggressively building new directional bets, at least not in BTC. The same dynamic applies to ether (ETH) and XRP.
- Solana is a notable exception. Open interest in SOL rose to a record 72.16 million tokens even as prices fell, a combination that typically indicates an influx of short positions. The sentiment is understandable given that SOL fell below its February low, while BTC, ETH, and XRP remained above theirs.
- TRX and ADA are also seeing open interest rise as their prices fall, suggesting similar short accumulation in those markets.
- The broader tone of derivatives confirms the bearish tilt. The 24-hour cumulative volume delta on the top 20 tokens is negative, meaning traders are selling at market prices rather than limit orders. This active and aggressive bearish participation suggests the possibility of deeper losses.
- Implied volatility is rising in tandem. Volmex’s 30-day implied volatility indices for bitcoin (BVIV) and ether (EVIV) have increased over the past three sessions, reflecting growing demand for options-based hedging and higher expectations of continued price swings.
- Selling biases have strengthened in both bitcoin and ether, indicating that investors are willing to pay a premium for downside protection. The $60,000 strike imposed on Deribit carries over $1 billion in notional open interest. As spot prices approach that level, large position adjustments are increasingly likely to occur, which could amplify volatility.
- The $55,000 put contract was the most actively traded options contract in the last 24 hours. The message from derivatives markets is unmistakable: sentiment is bearish.
symbolic talk
- The altcoin market underperformed the major cryptocurrencies on Thursday. Even the recent darling HYPE lost 12% after hitting an all-time high earlier this week.
- DASH, ENA, and FET also fell over 10% since midnight UTC as illiquidity in altcoin pairs resurfaced.
- Market depth is typically much lower in altcoin pairs than in bitcoin or ether, so the amount of capital needed to move prices in either direction is relatively low. Add to this a wave of liquidations and the asset simply cannot maintain the supply level, causing exaggerated downward price movements.
- Monero (XMR), despite being down 4% since midnight, is still in the black for 24 hours. Priced at $347, it is seemingly unaffected by the broader market decline.
- Much of the trajectory of altcoins will depend on bitcoin’s ability to stay above $60,000. A break below that could trigger more sell-offs, further weighing on illiquid altcoin pairs.
