bitcoin is struggling to regain a foothold above $70,000 as altcoins outperform.
The largest cryptocurrency is little changed in 24 hours, while the broader CoinDesk 20 index (CD20) rose 0.40% even as ether declined. Memecoins lead the gains, with the CoinDesk Memecoin Index (CDMEME) adding 1.5% while PIPPIN rose 46%.
Tokens linked to artificial intelligence (AI) also performed well. co-founded by OpenAI CEO Sam Altman, is up more than 3% in the last day, while Virtuals’ VIRTUAL token is up 2.4%. That’s as “agent AI”, where AI tools now also execute tasks, the narrative grows.
Still, the crypto fear and greed index still points to “extreme fear” in the market after last week’s sell-off.
Meanwhile, traditional markets stabilized, boosted in part by Prime Minister Sanae Takaichi’s landslide election victory in Japan. While Japanese bond yields rose after the result, they have since fallen close to pre-election levels. That reduces the risk that trillions of dollars invested abroad will return to Japan in search of higher returns.
Derivatives positioning
- Bearish momentum in BTC futures is intensifying as open interest (OI) continues to decline to $15.9 bo;;opm, indicating a deep and prolonged deleveraging phase.
- This shift is most evident in the funding rates of Binance (-7%) and Bybit (-8%), which have fallen into aggressive negative territory. That’s a sign that short sellers are paying a high premium to maintain their dominance. With the quarterly base stuck at 3%, institutional appetite remains marginalized.
- The BTC options market is showing a cooling of extreme defensive sentiment. The 25-delta one-week bias is 16%, while call dominance has recovered to 56%, indicating a shift toward bottom fishing.
- The term structure of implied volatility (IV) is moving from extreme backwardness to a hybrid position suggesting that while short-term protection remains costly, long-term volatility expectations are stabilizing.
- Coinglass data shows $290 million in 24-hour liquidations, with a 53-47 split between long and short positions. BTC ($114 million), ETH ($89 million), and others ($16 million) were the leaders in terms of notional settlements. The Binance settlement heatmap indicates $68,160 as the central settlement level to monitor, in case of a price drop.
symbolic talk
- Merkle Trade, the largest decentralized perpetual futures exchange on the Aptos blockchain, is about to close. The exchange disabled new trading positions on Friday and will forcibly close all open positions today.
- Merkle’s native token, MKL, has added 9% in the last 24 hours. It remains redeemable with no withdrawal fees, with a final rewards payout scheduled for February 12. The token has lost 77% in the last 12 months.
- The move comes less than two years after Merkle raised $2.1 million in a seed round backed by Aptos Labs, Hashed and Arrington Capital.
- Despite processing $30 billion in trading volume since its 2023 debut, the team gave no clear reason for the closure in a post on X last week, only noting that the decision was the result of “careful consideration.”
