The largest cryptocurrencies remained under pressure for the fourth day in a row, with bitcoin falling 2.5% in 24 hours to just below $62,400.
He is not alone. The CoinDesk 20 Index (CD20) is down 3.3%, with ether (ETH), XRP (XRP), and solana (SOL) all weaker. The CoinDesk Smart Contract Platform Select Limited Index fell 4%, with the CoinDesk 80 Index and CoinDesk DeFi Select Index close behind.
Concerns over Michael Saylor-led bitcoin treasury strategy (MSTR) continue to dominate market sentiment, with particular focus on its dividend-paying preferred stock, STRC.
“Strategy, the largest publicly traded BTC holder, has seen its preferred STRC collapse below par, and the market is now openly pricing in the queue it has to sell coins to defend the structure,” Marex analysts said.
“Add in five consecutive months of BTC trading below its estimated production cost of $78,000, quietly forcing weaker miners to capitulate, and you have two real sellers who weren’t in the frame a week ago,” they added.
Derivatives positioning
- Bulls continue to bleed as the market weakens following Wednesday’s tough Federal Reserve meeting. In the last 24 hours, more than $450 million in leveraged bets have been settled. As has been the case since the meeting, the majority are long positions.
- Open interest (OI) in bitcoin and ether futures has remained virtually unchanged over the past 24 hours. SOL futures OI rose to over 70 million tokens, just shy of the June 5 record of 71.57 million. In other words, demand for leverage remains near all-time highs, pointing to the potential for enormous volatility.
- The same goes for XRP, where OI futures are at their highest level since October last year.
- Looking at the cumulative volume delta, most of the largest 25 tokens except TRX and LAB show a negative OI-adjusted CVD over the last 24 hours. That is a sign that sellers are trading market orders, leading the price action, as opposed to passive limit orders. It’s been the same playbook since at least Wednesday.
- Funding rates for most tokens remain stable or negative, indicating bearish sentiment. ADA, XLM and BCH funding rates have been reduced to between minus 20% and minus 30%.
- In the bitcoin options market, traders are increasing the size of put options, preparing for a possible drop to $52,000 or lower in the coming weeks.
- The bearish sentiment is also evident in the delta 25 skews, which show that one-week puts are trading at a volatility premium of 10% or more.
symbolic talk
- Need evidence of how frenetic the sentiment is about AI? Check out the LAB token, the native cryptocurrency of LAB Terminal, which is a browser-based platform accessible through extensions for high-performance trade execution. Its key feature: AI-powered business research and routing to minimize slippage.
- LAB has gained 57% in seven days, a staggering increase compared to the malaise in the broader market.
- The outperformance doesn’t end there: the token is up 92% this month, following gains of 900% in May, 250% in April, and 78% in March. Talk about a bull market.
- During the same period, bitcoin has bounced from $68,000 to $82,000 and back to $63,000.
- While LAB’s performance is impressive, there is no apparent reason for this. And it is not without controversy.
- Blockchain research expert ZachXBT recently highlighted that insiders supposedly own 95% of the token supply. He said they have used four methods simultaneously to attract retail investors. These include high-interest over-the-counter loans with promotional terms, unilateral vesting period extensions, delayed or withheld market rewards, and undisclosed market-making agreements.
- As the old saying goes: All that glitters is not gold.
