The cryptocurrency market is on the verge of a big breakout with bitcoin trading at $78,000, the level it failed to surpass on Friday and a price it hasn’t surpassed since January.
A break above this level would trigger bullish momentum to $80,000 as $180 million in futures positions between $77,000 and $78,000 must be liquidated, according to the CoinGlass liquidation heat map.
However, there is also a $71 million long position that will be liquidated if the price fails to gain and falls back below $77,300, creating a defensive trading environment on both sides.
The market is up after US President Donald Trump extended the ceasefire in Iran, saying that country’s government was “severely fractured.”
Nasdaq 100 futures and S&P 500 futures rose 0.77% and 0.6%, respectively, as of midnight UTC following the announcement, suggesting an improvement in overall market sentiment.
Derivatives positioning
- BTC’s breakout to $78,000 caught bears off guard, leading to $286 million in market-wide short liquidations on derivatives exchanges. Long positions, or bullish plays, suffered liquidations of only $132 million.
- Still, overall crypto futures open interest (OI) has increased by more than 4% to $126 billion in 24 hours. Notably, OI grew in major tokens including bitcoin and ether (ETH), outpacing gains in spot prices, indicating renewed capital inflows and growing demand for leverage.
- Funding rates have turned positive for most tokens, including BTC, indicating a renewed bias for bullish bets. The 24-hour cumulative volume delta also shows the same picture.
- The M token stands out with annualized funding rates exceeding 200%, indicating an overheated market filled with bullish bets. Meanwhile, the HYPE and XML markets show a bias towards bearish short plays.
- Overall, crypto futures activity suggests there is room for further gains in the market. Also supporting the bullish case are the 30-day implied volatility indices for bitcoin and ether, which remain under pressure, pointing to market calm.
- On Deribit, bitcoin and ether risk reversals continue to generate negative values across all time frames. This is a sign of the richness of protective puts relative to calls.
- Block flows featured investor bias for call ratio spreads, a strategy used by traders to profit from a moderately bullish, sideways or slightly rising market. Traders also looked for combinations of bitcoin and ether, a volatility strategy.
symbolic talk
- The altcoin market was also in good spirits on Wednesday, with all major CoinDesk indices posting gains of at least 1.5% since midnight UTC.
- The CoinDesk MemeCoin Index (CDMEME) was the best performer, rising 3.4%, with one person converting $575 into more than $1 million in the recently launched ASTEROID token.
- Popular memecoins TRUMP and DOGE added 6% and 3.8%, respectively, reflecting broader optimism across the sector.
- There was also a surge in privacy coins DASH and XMR, which gained between 6% and 7% in the last 24 hours before declining slightly since midnight.
- CoinDesk’s overnight rate (CDOR) for USDC rose to the highest level since 2024, reaching 15%. CDOR measures stablecoin lending and borrowing activity on the Aave platform, which skyrocketed following the weekend’s $290 million KelpDAO exploit. A high interest rate reflects high demand.
