The cryptocurrency market is in a good mood on Monday after bitcoin rose to $93,350, its highest level since Dec. 11, before giving up some of those gains.
Most of the movement occurred at midnight UTC, around the time bitcoin futures trading opened on the CME exchange, creating a “gap” between $90,500 and $91,550.
These gaps typically fill over the course of a few days, meaning the price will likely return to the $90,500 level at some point during the week.
Traders are primarily focusing on bitcoin rather than altcoins, with the industry’s largest asset rising 1.33% since midnight, while the CoinDesk Meme (CDMEME) and Metaverse (MTVS) indices lost 6.4% and 2.3%, respectively, over the same period.
Stocks and precious metals also rose overnight to suggest a risk-on approach following recent US action in Venezuela.
Derivatives positioning
- Exchanges have liquidated $260 million worth of leveraged crypto futures bets in the last 24 hours, with short positions accounting for most of the action. In other words, leverage was skewed downward and the price rally took it by surprise.
- Open interest (OI) in BTC, its branch as well as XRP and BNB have increased between 2% and 5% in 24 hours, while ETH, SOL, DOGE and ZEC have had a stable to negative OI. These diverging trends indicate that investors’ risk appetite has improved only for a few select currencies.
- In addition to BCH, BTC, BNB, and XLM, the OI-adjusted cumulative volume delta for 20 other major coins has been negative over the past 24 hours, pointing to net selling pressure in the market.
- BTC annualized perpetual funding rates have surpassed 10% in a sign of growing demand for bullish exposure. The rates of several altcoins continue to be below zero.
- On Deribit, the bias for BTC puts weakened across the board, with traders chasing puts at the $100,000 strike.
- Block flows featured sell spreads in BTC and buy spreads in ETH.
symbolic talk
- Even as traders focused on bitcoin, several tokens outperformed the broader market on Monday.
- This included the newly issued LIT, the native token of the Lighter perpetual exchange, which is up 3.9% since midnight, while the AI-focused FET continued a weekend rally with a 7.4% increase since midnight.
- However, warning signs persist, with the cryptocurrency’s average Relative Strength Index (RSI) flashing at 58/100 as it enters “overbought” territory. This suggests a short-term decline is in store, as those making gains are likely to consolidate their gains.
- Some tokens failed to capitalize on overnight surge: Zcash is down 2.5% since midnight, while the memecoins doge (DOGE) and pepe (PEPE) lost 1.4% and 4.5% respectively.
- The fractured performance across the altcoin market shows two things; Trader indecision and a persistent lack of liquidity that has blighted the cryptocurrency market since the October liquidation event.
