The cryptocurrency market is teetering on the brink of a major price drop after suffering one of its worst weeks since July 2024.
bitcoin currently trading around $62,500 has lost over 14.5% since midnight UTC Monday morning, while ether (ETH) has plummeted over 17%, falling 5.5% on Friday alone.
Ether, the second-largest cryptocurrency, is now at its lowest level since April 2025, when it rebounded to $1,420 before hitting all-time highs in the following four months. A break below that level would take it towards the bear market levels of 2022, when it falls below $900.
The broader altcoin market also suffered heavy losses this week. One of the worst performers on Friday was zcash (ZEC), which fell more than 30% after a security researcher found an exploit that would have minted “unlimited” tokens in its protected pool.
There are multiple catalysts causing this week’s decline. Strategy (MSTR) CEO Michael Saylor attributed this to capital turnover in light of a series of AI IPOs in the US, while on-chain analysts point to a lack of spot cryptocurrency volume.
CryptoQuant notes that spot trading volume fell to $679 billion in April, the lowest monthly level since October 2023, indicating a lack of demand.
Derivatives positioning
- BTC derivatives positioning has gone from slight improvement to clear deleveraging this week. Open interest fell 15% to $17 billion, and funding rates went from negative to stable in multiple locations.
- On Deribit, the rate fell to -15% annualized, a notable change from the previous positive regime. The three-month annualized basis fell to 2.7% from 2.9% last week, confirming a pullback in institutional risk appetite.
- Options positioning has become distinctly defensive: Sell/buy volume has split 50/50 over the past 24 hours, losing previous buy bias, while the one-week 25 delta bias more than doubled to 27% from 13% a week ago. That indicates a sharp escalation in demand for downside protection.
- Initial implied volatility (DVOL) has risen further to 47, confirming sustained supply that aligns with broader derivatives deleveraging.
- Coinglass data shows $1.2 billion in 24-hour liquidations, with a 76-24 split between long and short positions. Bitcoin ($364 million), ether ($291 million), and zcash ($107 million) were the leaders in terms of notional settlements.
- The Binance liquidation heatmap indicates $60,900 as the central BTC liquidation level to monitor, in case of a price drop.
symbolic talk
- Zcash’s (ZEC) plight on Friday sowed seeds of doubt among privacy coins, with monero (XMR) losing 12% since midnight UTC and dash (DASH) falling 9%.
- ZEC’s losses were compounded by BitMEX founder Arthur Hayes, who said on X that his company had sold its entire allocation of the token.
- There were also great losses for which fell more than 10% after the project’s founder, Charles Hoskinson, said he was “taking a break” after warning of failures in the ecosystem.
- AI tokens lost their momentum from earlier in the week as FET, NEAR, and TAO fell 4% to 6% despite outperforming the rest of the market on Monday.
- One reason for altcoin holders to be hopeful is the fact that the average Relative Strength Index (RSI) of all cryptocurrency pairs is in “oversold” territory, suggesting that a relief bounce could be in play this weekend.
