bitcoin and the broader crypto market succumbed to a wave of selling pressure during the Asia session, leading to a drop to around $91,530 at 10:00 am UTC from around a local high of $93,750 at midnight.
The sell-off comes after a failed attempt to break $94,500 on Tuesday, the third in the last five weeks.
The altcoin market fared worse than bitcoin, with PENGU and XRP being the hardest hit with drops of 6.5% and 3.5% since midnight.
Bitcoin is now trading firmly back in December’s range, which saw several spikes between $85,000 and $94,500, even as it extended the decline that began in October.
Wednesday’s drop reflects an increase in risk aversion on the part of traders. US stocks also fell in pre-market trading, with Nadsaq 100 futures trading 0.32% lower as of midnight.
Derivatives positioning
- Exchanges have liquidated $465 million worth of crypto futures bets in the last 24 hours, with long positions accounting for more than 50% of the total. This is in stark contrast to the past two days, when shorts faced the brunt of the sell-offs.
- Still, cumulative open interest (OI) in globally traded cryptocurrency futures remains stable above $143 billion, the highest in nearly two months, with moderately positive funding rates indicating bullish positioning.
- The OI on XRP, DOGE, SUI and ZEC fell by 5% to 6%. This is likely related to profit taking following the recent price increases of these tokens.
- CME BTC futures are showing signs of green shoots, with OI rising from 100,000 BTC to 111,000 BTC since December 30. Still, the overall positioning remains light compared to a year ago, when OI stood above 191,000 BTC.
- On Deribit, selling biases for BTC and ETH continue to weaken, although optimism has yet to emerge.
- BTC block flows show a mixed profile, with chokes suggesting a bullish volatility bias and call spreads indicating rising price expectations. In the case of ETH, the straddle option, which is also a volatility strategy, was the preferred option.
symbolic talk
- Memecoins and privacy coins were the two worst performing sectors on Wednesday, with zcash leading the privacy plight, falling 4.5% since midnight UTC.
- The CoinDesk Memecoin Index (CDMEME) fell 1.5%, roughly double that of the CoinDesk 5 Index, which measures the price of BTC, ETH, XRP, SOL, and ADA.
- A ray of hope for the altcoin market is the decentralized finance (DeFi) sector, with the total value locked (TVL) across the ecosystem rising 0.17% in the last 24 hours despite the assets moving lower, suggesting positive inflows, according to DefiLlama.
- CoinMarketCap’s “altcoin season” indicator is at 25/100, slightly below last week’s high of 27, but considerably above the December low of 14, suggesting signs of optimism in the altcoin market.
- An outlier of the downward movement was which remains in the black since midnight to add to a gain of 1.2% in the last 24 hours.
