The cryptocurrency market is recovering from an overnight sell-off, with bitcoin trading lower at $69,400 after losing 2.6% since midnight UTC and ether (ETH) returning to $2,000 after falling 4.1%.
The declines are accompanied by a sharp decline in American stocks and precious metals. Nasdaq 100 futures are down about 1%, while gold has lost 1.8%.
Meanwhile, oil rose back above $100 a barrel as supposed peace talks between the United States and Iran stalled.
The altcoin market was the hardest hit, with the CoinDesk Computing Select Index (CPUS) and the CoinDesk DeFi Select Index (DFX) falling 4.3% and 3.9%, respectively, during the Asian session.
Zooming out, bitcoin and the broader crypto market are still stuck in a price range that has persisted since early February despite multiple attempts to break out to the upside.
Derivatives positioning
- The impasse in negotiations between Iran and the United States appears to have triggered renewed risk aversion, leading to capital outflows from crypto derivatives. Cumulative crypto futures open interest (OI) has decreased by 3.5% to $108.30 billion.
- The OI in PAXG fell almost 11% in 24 hours, and the price of gold fell 1.8% to $4,423 an ounce. DOGE, ZEC and TAO are other big OI losers.
- Some traders may have shorted BTC futures on major exchanges as prices fell below $70,000 during European hours. This is evident by the slight increase in OI on major dollar and USDT denominated exchanges to 232K BTC from 229K BTC.
- ETH, BNB, XPR, SOL, TRX, and DOGE are experiencing negative fund rates, a sign of a greater bias toward bearish short positions.
- Meanwhile, CC, TRX and BCH stand out with positive cumulative volume deltas pointing to positive positioning, while other large companies, including BTC, see the dominance of sellers.
- In the options market, some traders are seeking downside protection in ether by buying risk reversals, a position that involves selling call options to fund put option purchases, TDX Strategies said in a market note.
- On Deribit, BTC and ETH put options remain more expensive than call options across all timeframes. At first, ether puts are more expensive than BTC, a sign that traders are preparing for a further drop in ether in the near term.
symbolic talk
- The cryptocurrency market is in the red across the board on Thursday, but some tokens fared worse than others; The AI-focused FET is down 7.7%, while ETHFI and RENDER have given back much of last week’s gains, falling 6.3% and 5.9%, respectively.
- The “Altcoin Season” index is still at 48/100, suggesting that a bullish rally could be on the cards if the market can find support and consolidate.
- Around half a dozen top 100 tokens remain in the black over the past 24 hours, these include ethena (ENA), up 2.2%, and layer 1 network tokens XDC, NIGHT and TRX, all up 1% to 2%.
- Overall, worryingly low liquidity that has not recovered since late 2025, coupled with the fickle nature of retail cryptocurrency traders, could create the perfect storm across the entire altcoin market, producing an exaggerated slowdown.
