The cryptocurrency market fell a day after the Federal Reserve raised expectations that US interest rates will rise.
bitcoin the largest cryptocurrency by market capitalization, was changing hands around $63,900, a drop of more than 1% in the last 24 hours. Other major tokens including XRP (XRP), ether (ETH), BNB coin and solana (SOL), recorded similar losses.
The CoinDesk 20 Index (CD20) fell more than 1.2% in the same period. The DeFi Select Index (DFX) fell 5%, the biggest drop among all CoinDesk benchmarks.
Still, there were pockets of strength. For example, Provenance Blockchain’s HASH token rose 15%, along with a nearly 10% gain in Stellar’s lumen (XLM).
“Sentiment has faded, the fear gauge has sunk into extreme fear and BTC is now approximately 48% from its high of $126,000 since last October. Contrarian fuel if you are patient, but a clear sign that positioning is defensive and conviction is low,” Marex analysts said.
Derivatives positioning
- Over $440 million worth of crypto futures bets have been settled across all exchanges in the last 24 hours. Most were bullish long positions, indicating that traders had positioned themselves for a rally following Wednesday’s interest rate decision from the Federal Reserve.
- BTC futures open interest (OI) has retreated to 730,000 BTC from Tuesday’s high of 742,000 BTC, indicating renewed risk aversion. The same applies to the OI of ether.
- XRP OI is around 2.30 billion tokens, the highest level since October, surpassing the recent peak of 2.29 billion tokens. This is not necessarily bullish because both the perpetual funding rates and the 24-hour cumulative volume delta (CVD) are negative, pointing to a bearish dominance in the market.
- Generally speaking, most of the top 25 tokens, excluding TRX and SOL, recorded a negative 24-hour CVD, a sign that the bears are aggressively attacking market orders rather than placing passive limit orders.
- In this context, the 30-day annualized implied volatility indices for bitcoin and ether continue to indicate calm. Bitcoin’s BVIV index is around 41%, having reversed a rise from the beginning of the month to almost 59%.
- In the options market, flows tracked by Laevitas show increased demand for puts expiring on June 21, a clear indication that traders are looking for protection against downside volatility heading into the weekend.
symbolic talk
- Hyperliquid’s token continues to rise, but its application layer does not. HYPE is up 34% on the week and its main perpetual exchange is seeing record volume, however HyperEVM, the general-purpose layer intended to attract third-party developers, has not produced a standout application.
- A criticism circulating in the Hyperliquid community maintains that the construction sector has stagnated, pointing to projects that have closed or lost momentum and that activity is concentrated in a few hands.
- The data supports the gap. HyperEVM has about $1.5 billion in total value locked (TVL), the money parked in its apps, compared to more than $5 billion in daily volume on the major exchange. More than 175 teams have been deployed, but few have significant traction.
- The traction that exists is concentrated. Unit is the lead implementer of HIP-3 markets, Hyperliquid’s permissionless system for listing perpetual startups, and Kinetiq leads liquid bets. Relying on one or two builders is risky, in case one of them backs down.
- The disincentives seem structural. Builders are hesitant because Hyperliquid may simply build a winning idea, and an app that likely won’t reward early adopters with an airdrop and may not survive the year gives traders little reason to lock capital there.
- The tension is that Hyperliquid says attracting builders is important to it. The token and trading engine are among the strongest in crypto, while the layer meant to expand the ecosystem has yet to find its breakthrough moment like Solana or Ethereum did.
