The cryptocurrency market fell for a second day on Tuesday with bitcoin and ether (ETH), both losing around 0.75% since midnight UTC.
The drop comes after Bitcoin failed to break above the $80,000 resistance level twice over the past week, with the most recent attempt occurring during Asian hours on Monday.
The jubilation over last week’s jump to $79,500 from $70,000 is beginning to subside as several key price indicators turn bearish, including the Coinbase Premium Index turning negative, a sign of waning demand from U.S. investors.
US stocks will also open lower on Tuesday, with Nasdaq 100 futures trading 0.5% lower as of midnight UTC, while the US Dollar Index (DXY) is up 0.25%.
The stalled peace talks between Iran and the United States continue to boost traditional markets, with Brent crude oil now firmly above $105 per barrel.
Derivatives positioning
- Across the market, crypto futures open interest (OI) has fallen more than 1% to $120 billion in the last 24 hours. This is in addition to a 3% drop in trading volume and an 8% drop in liquidations, suggesting a slight cooling in market activity. Fewer open positions, lower participation, and lower forced liquidations indicate less aggressive trading overall.
- Bitcoin futures and options open interest ratio has fallen to 57.5%, the lowest level since January 31. It’s a sign of a renewed bias toward directional bets and increased short-term volatility.
- Bitcoin futures OI fell to 723.54 BTC, down more than 9% from the recent high of 796.71 BTC. This decline is accompanied by persistently negative funding rates, which are usually a sign of bearish positioning. However, this time they come from institutional hedges and not outright bearish bets.
- Of note is DOGE’s open interest, which is up 6% in the last 24 hours, outperforming other major cryptocurrencies. The OI at 14.39 billion tokens is the highest since October 10, indicating strong capital inflows. Positive funding rates and a growing 24-hour cumulative volume delta suggest that traders are increasingly positioning themselves for potential upside.
- SOL and ADA have the most negative 24-hour cumulative volume deltas (CVDs), indicating that market sellers who place bids initiate more trades than market buyers who raise offers. It shows aggressive selling pressure, even though one buyer matches each seller.
- Bitcoin and Ethereum’s 30-day implied volatility indices are hovering around three-month lows, indicating moderate risk pricing in the market amid macroeconomic pressures such as high oil prices and unresolved peace talks between the United States and Iran. As Deribit says, “the Middle East trading game theory has drugged the BTC spot market into a deep slumber.”
- On Deribit, risk reversals on options show that options trading is at a premium on both BTC and ETH, with BTC puts being noticeably more expensive than ETH. The price points to a bullish outlook for the ether-bitcoin relationship.
- In terms of flows, the $80,000 bitcoin strike has been the most traded in 24 hours, both in volume and open interest. Meanwhile, block flows featured risk reversals and placed spreads on BTC and spreads and spreads on ether.
symbolic talk
- The altcoin market underperformed Bitcoin on Tuesday, as evidenced by CoinDesk’s Memecoin Select Index (CDMEME) and DeFi Select Index (DFX) falling 1.6% and 1.2%, while the bitcoin-dominant CoinDesk 20 (CD20) benchmark lost just 0.8%.
- The zcash privacy token (ZEC) was the worst-performing altcoin on CoinDesk 100 (CD100), losing 5.6% since midnight UTC, followed closely by CHZ and HYPE, which fell 3.9% and 3.5%, respectively.
- While the broader crypto market is down, apecoin (APE) bucked the downtrend, rising more than 17% as traders capitalized on a negative long/short ratio, liquidating a $1 million short position in the process.
- CoinMarketCap’s “Altcoin Season” indicator remains in a neutral zone at 39/100, suggesting that investors are focused on bitcoin and whether it can break above $80,000 or continue its decline towards the mid-$70,000 region.
