The cryptocurrency market faced another grueling sell-off on Thursday, with several altcoins facing double-digit downward moves while BTC and ETH began to challenge critical support levels.
The move appears to be a continuation of the weekend’s $500 billion bloodbath, with traders now acting more cautiously to avoid another potential cascade of liquidations.
Derivatives positioning
- The BTC futures market continues to stabilize, with Open Interest holding firm at around $25 billion. The 3-month annualized basis has also remained stable, trading in the 5-6% range. However, a notable divergence in funding rates highlights mixed market sentiment; Binance and OKX now have negative funding rates of -2% to -3%, while other platforms remain stable or slightly positive. This negative financing on major exchanges indicates that a large number of traders are holding short positions, suggesting a degree of bearish conviction despite stable open interest and base.
- The BTC options market is showing a strong bullish signal. The 24-hour buy/sell volume is now roughly balanced, indicating steady demand from both sides. However, the most significant metric is the 1-week 25 Delta Skew, which has shot up to 12.62%, suggesting that traders are willing to pay a substantial premium for call options and are aggressively positioning themselves for a price increase.
- Coinglass data shows $415 million in 24-hour liquidations, with a 70-30 split between long and short positions. ETH ($115 million), BTC ($80 million), and Others ($43 million) were the leaders in terms of notional settlements. The Binance settlement heatmap indicates $110,009 as the central settlement level to monitor, in case of a price drop.
symbolic talk
By Oliver Knight
- Altcoins suffered another day of annihilation on Thursday as several assets faced double-digit declines.
- aster and lido (LDO) fell between 12% and 13% in the last 24 hours, and CoinMarketCap’s “altcoin season” index fell to 27/100, its lowest point in more than three months.
- Major cryptocurrencies BTC and ETH are still at respective support levels of $110,000 and $4,000, although sentiment has turned bearish after the market failed to recover from last weekend’s $500 billion drop.
- An outlier from Thursday’s sell-off was which rose from intraday lows of $0.312 to $0.322 as it begins to show strength and signs of recovery.
- There are multiple catalysts behind the recent sell-off; in particular the distribution by long-term bitcoin holders, which has created an environment with strong selling pressure coupled with a lack of demand.
- Altcoins are typically negative recipients of bitcoin’s decline and liquidity levels, especially after the weekend’s leverage explosion, remain low. This means that when a liquidation occurs, prices quickly remove support levels until enough liquidity is found to meet seller demand.
