Crypto markets opened the week under pressure, extending losses after a volatile weekend like bitcoin showed tentative signs of stabilizing below $70,000.
Although the largest cryptocurrency fell more than 2.8% in the last 24 hours, it remains well below its recent lows of around $60,000. Still, it has struggled to regain momentum after last week’s sharp decline that reignited debate over whether the market has entered a deeper bearish phase or is nearing a bottom.
Bitcoin bulls pointed to the slowing downside moves as a sign of exhaustion, even as critics took victory laps. However, attention is being paid to software stocks, some of which have begun to recover as concerns of a deeper collapse eased.
The CoinDesk 5 Index (CD5) fell 3.4%, with the five largest cryptocurrencies falling. Ether fell about 5%, underperforming Bitcoin as traders reduced risk on major tokens but remained above the $2,000 psychological support. The broader CoinDesk 20 index (CD20) is down 3.7%.
Derivatives positioning
- BTC futures are experiencing a clear bearish reversal after open interest (OI) fell from $19 billion to $16 billion over the past week, marking a period of sustained deleveraging.
- Bybit (-2.24%) and Binance (-0.5%) funding rates have moved from neutral to negative, indicating that short sellers are now leading the narrative. With the three-month base compressing to 3%, institutional demand has cooled, reflecting a broader derivatives landscape dominated by risk-off sentiment.
- Options data confirms this defensive shift, with a 25 delta one-week bias for BTC rising to 20% and call options dominance falling to 48%.
- The implied volatility (IV) term structure is now in extreme backwardation, with initial volatility of 85.03% eclipsing long-term expectations (~50%). This is a huge premium for immediate protection against short-term price declines.
- Coinglass data shows $397 million in 24-hour liquidations, with a 45-55 split between long and short positions. BTC ($234 million), ETH ($74 million), and SOL ($14 million) were the leaders in terms of notional settlements.
- The Binance settlement heatmap indicates $68,160 as the central settlement level to monitor in case of a price drop.
symbolic talk
- Crypto wallet Rainbow introduced its RNBW token last week, but the launch was not easy.
- The Ethereum-based project introduced the token to the Base layer 2 network, with the price falling to $0.025, a 75% drop from its initial coin offering (ICO) of $0.10 just two months earlier. It has since risen to $0.031.
- That drop ended the expectations of speculators who were betting on a fully diluted valuation (FDV) of $100 million. At Polymarket, the odds on that bet peaked at nearly 80% at the beginning of the year. The FDV is now approaching $31 million.
- At the center of the chaos were delays in distributing tokens to early buyers and participants in Rainbow’s on-chain rewards program. Some users said they had not received their airdropped tokens hours after the drop.
- Rainbow co-founder Mike Demarais blamed backend infrastructure for the collapse in demand. US-based investors will not be able to fully access their tokens until December 2026, according to the award terms.
- Rainbow raised $18 million in a 2022 Series A led by Reddit co-founder Alexis Ohanian’s firm Seven Seven Six. The wallet is known for its gamified features and a points system linked to the RNBW token.
