The cryptocurrency market widened its tight trading range through Tuesday, constrained by low volume and a low liquidity environment.
Daily bitcoin trading volume fell 25% to $35 billion in the last 24 hours and ether volume fell 21% to $24.6 billion.
A decline in volatility can be attributed to general apathy in the cryptocurrency market, which has occurred alongside a euphoria-inducing rally in precious metals.
Gold is currently trading at $5,085 after hitting a series of all-time highs over the past week, while silver is up more than 57% since the start of the year as traders flock to safe-haven assets.
The rotation into metals can be clearly seen on derivatives exchange HyperLiquid, with silver futures now approaching $1 billion in daily volume. This is more than all other assets except bitcoin and ether, although it is worth noting that funding rates are showing a negative bias, suggesting traders are shorting positions rather than buying a potential top.
With US President Donald Trump imposing new 25% tariffs on South Korea on Monday following a political joust with the European Union over Greenland last week, the risk-averse sentiment may well persist further.
Derivatives
- Exchanges have liquidated more than $270 million in leveraged crypto futures bets in 24 hours, with bearish (short) plays making up the majority of the total. The figures show that traders were positioned for a deeper decline across the market following last week’s 7% drop in bitcoin and were caught off guard by the rebound from $86,000 to nearly $88,000.
- Volmex’s 30-day bitcoin and ether implied volatility indices remain near multi-month lows, indicating no signs of panic or fear, even as flows and technical charts paint a bearish picture.
- Open interest (OI) in futures linked to Hyperliquid’s HYPE token rose 30% to over 57 million HYPE, approaching December’s record of 57.44 million HYPE. The decentralized exchange is said to have regained market share from its rivals Aster and Lighter.
- The OI in ETH, SOL, XRP, and DOGE has increased by 2% to 3%, while the BTC OI has remained stable.
- Annualized perpetual funding rates for most large companies remain moderately positive, a sign of bullish bias, but nothing out of the ordinary. TRX and DOGE rates have turned negative, indicating a dominance of shorts.
- On Deribit, BTC and ETH put options continue to trade higher than call options, a sign of lingering concerns about a downside. According to some observers, downside protection is now a crowded trade and call options look relatively cheap for those with a bull market thesis.
- Bearish directional positioning, such as put spreads and volatility bets, straddles and strangles, cumulatively account for nearly 50% of all BTC block trades over 24 hours. In the case of ETH, traders preferred the iron condor, a strategy to profit from a potential range-bound market.
symbolic talk
- Impressive volume in the silver futures market has boosted HYPE, HyperLiquid’s native token, by over 22% in the last 24 hours as trading volume more than doubled to $510 million.
- Zcash Privacy Coins and monero rose 4% and 3%, respectively, since midnight UTC, outperforming bitcoin and major cryptocurrencies ETH, XPR, and SOL, which fell between 0.4% and 1%.
- Pump.fun’s native PUMP token saw a significant 14.5% surge since midnight as traders and token traders attempted to extract value from the memecoin market despite increased market stability.
- January trading volume on Pump.fun has already surpassed $10 billion, reaching its highest level since June with four days left in the month, according to DefiLlama.
- The bitcoin-dominant CoinDesk 20 (CD20) index is little changed since the beginning of the year, while the heavily altcoin-weighted CoinDesk 80 (CD80) is up 3.6%.
