Crypto market shows signs of strength on Tuesday with bitcoin rising to $76,500, a gain of about 1% since midnight UTC.
The price shot up to around $77,000 at 9:45 am before encountering a wave of spot sellers, who are likely protecting a potential breakout above Friday’s high of $78,300.
Ether (ETH) lagged behind bitcoin, rising just 0.3% to $2,320, as investors remained cautious about altcoins following the $290 million KelpDAO exploit over the weekend.
The war in Iran continues to dictate price action, and the US vice president will travel to Pakistan for peace talks. A resolution is likely to lower oil prices, helping to boost risk assets that have been inversely correlated since the war began.
US stock index futures rose, demonstrating a return to risk sentiment.
Derivatives positioning
- The long-short ratio for the cryptocurrency futures market is 50.68%, indicating a nearly even split between bullish and bearish positions. In other words, traders are largely undecided about the direction of the market’s next move.
- In the last 24 hours, major tokens such as BTC, SOL, HYPE, and BNB have added between 1% and 3% in futures open interest (OI), a sign of capital inflows. ETH, DOGE and ZEC have seen slight drops in OI.
- Open interest in AAVE futures has risen to a record 3.59 million tokens. At the same time, the OI-adjusted cumulative volume delta has turned negative, indicating that sell orders are dominating and pushing bids, while funding rates remain near zero. Overall, the setup points to a slight bearish bias.
- Bitcoin and Ethereum funding rates remain negative, suggesting a bias towards short positions. This continued bearish environment creates potential for a short squeeze. This is a scenario where price resilience prompts bears to unload their bets en masse, adding to the bullish momentum of the spot price.
- On the CME, activity in BTC futures continues to cool, even as exchange-traded funds attract millions. This combination indicates that capital inflows into the ETFs are primarily bullish directional plays rather than arbitrage bets involving a short BTC futures position versus the long ETF position.
- On Deribit, BTC and ETH put options continue to trade at a premium to call options, reflecting bearish concerns.
- Speaking of block flows (large trades executed over-the-counter), crossovers and chokes cumulatively account for more than 50% of the activity in the last 24 hours.
symbolic talk
- The altcoin market is still reacting to the weekend’s $290 million exploit in KelpDAO with decentralized finance (DeFi) tokens ethena (ENA), etherfi (ETHFI), and jupiter (JUP) all posting losses in the past 24 hours despite a marginal recovery since midnight UTC.
- The CoinDesk Memecoin Index (CDMEME) is the worst-performing benchmark on Tuesday, losing 0.24%, while the bitcoin-dominant CoinDesk 20 (CD20) rose 0.65%.
- The altcoin market is showing indecision, and the CoinDesk 80 (CD80) remained stable during the Asian and European sessions.
- AAVE is starting to recoup some of its weekend losses after a 22% drop, adding 2.6% despite widespread negative sentiment across the DeFi sector.
- CoinMarketCap’s “Altcoin Season” indicator is at 39/100, rising from the weekend low of 34/100, but still demonstrates investors’ preference for bitcoin over altcoins.
