Crypto Market Faces Wave of Selling Pressure with Bitcoin and ether (ETH) lost 1.1% and 1.7%, respectively, since midnight UTC.
The downward shift comes after bitcoin rose to a monthly high of $65,500 on Wednesday, prompting some traders to take profits.
Altcoins PUMP and ZEC also fell, falling 4.4% each after Tuesday’s strong rallies faded, highlighting the lack of liquidity in both directions.
U.S. stocks also lost ground. Futures for the Nasdaq 100 index, dominated by technology stocks, fell 0.25%, extending a bearish trend that began 30 days ago.
One of the main catalysts for price action across asset classes is the war in the Middle East, with Iran launching attacks on US military bases in neighboring Gulf states on Thursday and the US continuing its wave of airstrikes.
Derivatives positioning
- Ether’s price has fallen 1.7% since midnight UTC, slightly more than bitcoin’s drop. ETH’s underperformance appears to be driven by the development of bullish plays rather than aggressive new short selling. This is evident by the decline in open interest (OI) to 14.35 million ETH from the five-week high of 14.45 million ETH reached on Wednesday. BTC-linked futures show a similar dynamic.
- Meanwhile, OI in XRP rose to a 10-day high of 2.21 billion XRP along with a 0.6% drop in the spot price. This combination is seen as representing a growing bias towards bearish exposure, although XRP’s positive funding rates contradict that interpretation. That said, the 24-hour cumulative volume delta (CVD) for XRP is negative, meaning that short plays are executed with market orders rather than passive limit orders.
- Another notable open interest winner is SUI, the native token of the Sui blockchain. Positions increased by 15%, although the total OI of 654 million tokens remains in line with levels seen earlier this week. The SUI token has fallen almost 2% in 24 hours.
- Generally speaking, most coins except BTC, ETH, and XMR have a negative 24-hour OI-adjusted cumulative volume delta (CVD), a sign that the bears are leading the price action.
- Bitcoin’s 30-day expected or implied volatility index is up 2% to 38%. Volatility tends to reverse, and historically, readings below 40% have consistently heralded renewed market turbulence.
- In options listed on Deribit, there has been a notable increase in both trading volume and open interest in BTC calls at strike prices of $70,000 and $72,000. This likely reflects a large bullish spread that crossed the tape recently. The strategy bets that prices will rise to $72,000 by the end of July.
- In the case of ETH, the option expiring at the end of July at the $2,300 strike is the most traded bet of the last 24 hours. A call represents a bullish bet on the market.
symbolic talk
- Artificial intelligence sheet defied bearish cryptocurrency price action on Thursday, rising 3.5% since midnight as it looks to test the $2.20 resistance level, prompting a rejection and subsequent drop to $1.85 on July 2.
- The rest of the altcoin market followed bitcoin and ether, with coins such as HYPE, SOL and ENA losing between 1.3% and 1.8% since midnight, while NEAR, JUP and DASH recorded steeper losses.
- CoinMarketCap’s “Altcoin Season” indicator is still range-bound, currently at 48/100 after losing its position at 58/100 on Monday as investors refocused on bitcoin.
- A recent area of interest in the altcoin sphere has been memecoins, particularly the tokens launched on the new Robinhood blockchain. One, cashcat (CASHCAT), rose from relative obscurity to a market cap of $220 million in its first week of operation on the Robinhood Chain. It has since fallen back to a market capitalization of $91 million despite maintaining around $60 million in daily trading volume.
