The cryptocurrency market plummeted towards April lows on Friday, with bitcoin and ether both fell about 10% in 24 hours.
BTC was recently trading around $82,200 and ETH near $2,700. The altcoin market fared worse than major cryptocurrencies as several tokens fell by up to 20%. The CoinDesk 20 Index (CD20) fell 10%, while the CoinDesk 80 Index of the next largest tokens lost 12%, with all members in negative territory.
The liquidation was due in part to the liquidity crisis that arose during the October liquidation and sell-off event. A recent CoinDesk investigation revealed that liquidity was still empty after the crisis, paving the way for more violent price swings.
It wasn’t just cryptocurrencies that felt the pressure. US stocks have also been falling, with the Nasdaq 100 now trading 9.4% below its all-time high on October 31.
Derivatives positioning
- Bitcoin’s 30-day implied volatility index, BVIV, has surpassed 64%, extending this month’s rise.
- The ether volatility index has jumped to 87%, the highest since April 10.
- Both moves indicate growing uncertainty in the market and growing demand for options as spot prices fall.
- BTC open interest (OI) plummeted to 700,000 BTC from 752,000 BTC in a day as the price drop shook bullish leverage bets. According to one analyst, some traders “catch the knife” or buy futures in a falling market, which is akin to catching a falling knife.
- OI has crashed across the board in the past 24 hours, with DOGE, ENA, and ASTER experiencing drops of over 15%.
- On Deribit, BTC and ETH options continue to show a bias towards puts.
- In BTC, put spreads account for 46% of the total 24-hour block flow, with the diagonal put spread a distant second. ETH flows show a similar profile.
- Some traders have purchased deep out-of-the-money IBIT puts at the $15 strike price. (yes, you read that right).
symbolic talk
By Oliver Knight
- The altcoin market took another brutal hit on Friday as several tokens fell to multi-month lows.
- The fear and greed index hit 11/100, its lowest level since CoinMarketCap began tracking it in June 2023.
- , , , and All lost between 16% and 18% of their value in the last 24 hours as traders sold in an incredibly illiquid market.
- Bitcoin and Ethereum were not immune, falling around 10% each, although the cryptocurrency’s average Relative Strength Index (RSI) is currently in “oversold” territory, meaning the market may be due for a relief rally.
- While the broader market dealt with a forceful sell-off, some traders managed to pocket millions of dollars by attacking foundation founder Jesse Pollak’s creator coin, JESSE. According to Arkham Intelligence, two of the traders collectively made $1.3 million by purchasing the tokens on the same block that the token was deployed on.
