Crypto market holding on to crucial support level, with bitcoin it has barely moved since midnight UTC after recovering on Thursday from its lowest level since September 2024.
The largest cryptocurrency was recently trading near $59,700, having fallen as low as $58,100.
Ether (ETH) failed to mirror bitcoin’s rebound, falling another 1% and extending its series of declines to three consecutive days. It recently had around $1,550.
US stocks also start Friday signaling weakness: Nasdaq 100 and S&P 500 futures are down 1% and 0.4%, respectively, since midnight as the tech rally of the past three months continues to weaken.
A token that countered the bearish market sentiment was aave which added as much as 6.8% since midnight, building on a 17% gain over the past week after CoinDesk reported that crypto exchange Kraken was looking to take a 15% stake in the DeFi company.
Derivatives positioning
- Market volatility continues to weigh on leveraged futures positions. In the last 24 hours, another $1 billion worth of positions were liquidated, with long positions once again accounting for the majority. Notably, ETH experienced more liquidations than BTC in the last 12 hours.
- Bitcoin futures open interest (OI) rose for the second day in a row to 778,000 BTC, a sharp rise from recent lows near 730,000 BTC. Open interest increased during Thursday’s late sell-off, suggesting traders added short positions on the dip in anticipation of further decline.
- The picture is different in ether futures, where open interest has remained stable near the 14 million ETH level since at least June 15. This is somewhat constructive as it indicates that traders are not aggressively shorting the price decline. A similar pattern applies to XRP.
- Solana’s open interest has retreated from all-time highs but remains elevated compared to recent months, pointing to the potential for continued volatility.
- The OI-adjusted 24-hour cumulative volume delta continues to show bearish dominance across most of the top 25 cryptocurrencies, with the notable exceptions of BNB, SOL, and TON. The negative reading suggests that the bears are more aggressive than the bulls, favoring market orders over passive limit orders. This trend has persisted since Tuesday.
- Annualized 30-day implied volatility indices are indicating increasing levels of concern. Bitcoin’s BVIV index jumped to 53% earlier today, its highest level since June 7 and a sharp rise from the June 16 low of 39%. The ETH index rose to 66%.
- Wall Street’s equivalent, the VIX, has also recently risen 15% to 20%, but remains within the range seen since early April, indicating that stocks are not yet in panic mode. A similar message comes from the US Treasury Market Implied Volatility Index, MOVE.
- On Deribit, the one-week bitcoin options bias is approaching 30%, reflecting a substantial premium for puts, or defensive positions, over calls and underscoring strong bearish fears. The one- and three-month biases convey a similar message.
- Block flows included a large trade in the $53,000 put option expiring on July 10, along with demand for ether risk reversals.
symbolic talk
- Aave outperformed the broader altcoin market, and an honorable mention goes to solana (SOL), which has added 2% since midnight and is now trading around $68.95 after falling to $64.05 on Thursday.
- AI tokens continue to unwind; RENDER, NEAR, FET and TAO lost between 1% and 1.5% on Friday, extending their declines.
- Hyperliquid (HYPE) also fell, falling 2.6%. It has now lost 18.5% since hitting a record high 12 days ago.
- Ethena (ENA) remains one of the worst performing altcoins, losing another 5% on Friday. It has now fallen 34% after hitting the month’s high on June 3.
- ENA’s plight can be attributed to the current bear market, as part of the platform’s yield generation strategy is tied to positive funding rates, which have now turned negative.
