By Omkar Godbole (All times ET unless indicated otherwise)
Crypto market sentiment remains unsettled following bitcoin’s quick reversal from an early Tuesday spike to $114,000, with most altcoins mirroring this fluctuation. The CoinDesk 20 Index is little changed over 24 hours, even as gold’s rally stalled, raising hopes for rotation into digital assets.
This two-way price action liquidated crypto futures bets worth $600 million. According to CryptoQuant, this represents a three-sigma liquidation event: The liquidation volume was three standard deviations away from the average, marking it as an extreme outlier and an indicator of heightened volatility.
Meanwhile, the ratio of open interest in bitcoin options to futures open interest rose to its highest level since late 2023, typically signaling amplified price swings ahead. Additionally, bitcoin’s 30-day implied volatility indices remain elevated, sustaining gains seen following the October 10 crash and highlighting lingering uncertainty.
“Such fluctuations do not contribute to improving the mood of crypto investors,” said Alex Kuptsikevich, chief market analyst at FxPro, in an email.
The ongoing nervousness, evident in the Crypto Fear & Greed index’s drop to 25, could present a good entry point. “At current levels, the rule of ‘buy when everyone is afraid’ may apply, or there may be a transition to a more intense sell-off after three months of stagnation,” he noted.
In other news, Japan’s newly elected Prime Minister Sanae Takaichi is reportedly preparing an economic stimulus package exceeding last year’s $92 billion to assist households in managing inflation. Observers, including Arthur Hayes, CIO of Maelstrom Fund, view this move as potentially beneficial for bitcoin’s upward trajectory.
As for industry updates, crypto trading firm FalconX is acquiring ETF manager 21Shares, aiming to develop funds focused on derivatives and structured products. Additionally, reports indicate that some of Asia’s largest stock exchanges are becoming averse to digital asset treasury firms.
In traditional markets, the dollar index maintained weekly gains while gold fell for the second consecutive day, nearly testing the $4,000 per ounce mark. Stay alert!
What to Watch
For a comprehensive list of events this week, see RialCenter’s “Crypto Week Ahead.”
- Crypto
- Oct. 22, 11 a.m.: Circle is hosting a virtual seminar on Zoom titled “Inside the Circle Payments Network” to explain how financial institutions can leverage this network for fast, compliant stablecoin settlements.
- Oct. 22: David Sacks, White House AI and Crypto Czar, will meet with Republican Senate Banking Committee members to discuss advancing crypto market structure legislation.
- Oct. 22: Two industry roundtables on crypto regulation at the U.S. Senate, one led by Democratic Senator Kirsten Gillibrand and the other by Republican Senator Tim Scott.
- Oct. 22: Zilliqa will activate its mainnet upgrade, Zilliqa 2.0, with a hard fork at block 11,998,800.
- Macro
- Oct. 22, 8 a.m.: Mexico’s August Economic Activity. YoY Est. -1%, MoM Est. 0.1%.
- Earnings (Estimates based on FactSet data)
- Oct. 22: Tesla, post-market.
Token Events
For a comprehensive list of events this week, see RialCenter’s “Crypto Week Ahead.”
- Governance votes & calls
- Unlocks
- Oct. 22: Scroll to unlock 43.42% of its circulating supply worth $13.56 million.
- Oct. 22: MultiBank Group to unlock 11.97% of its circulating supply worth $16.31 million.
- Token Launches
- Oct. 22: Turtle to be listed on Binance.
- Oct. 22: KTA to be listed on Coinbase.
Conferences
For a comprehensive list of events this week, see RialCenter’s “Crypto Week Ahead.”
Token Talk
By Oliver Knight
- ZEC continued its ascent on Wednesday, leading the otherwise weak altcoin market with a 9.2% move to the upside over 24 hours.
- The privacy token is now up an astounding 461% in the past month and continues to hit record highs.
- This rise is fueled by positive sentiment around the growth of shielded tokens, which currently make up 27.5% of the total supply.
- Shielding is a privacy mechanism that masks transactions. These tokens must be held in a non-custodial wallet, meaning not on an exchange.
- With a significant amount held in private wallets, the sellable supply is constrained.
- Coupled with rising demand, this results in a relentless rally that outperforms nearly every crypto token in circulation.
- ZEC’s gain stands as a rare sign of optimism amidst a broader downturn, as other tokens have fallen to months-long lows.
- ASTER, which was once favored, fell below $1.00 on Tuesday, compounding a 33% slide over the past week.
- Recently issued plasma tokens have also seen demand waning, resulting in a 25% drawdown over the past seven days.
Derivatives Positioning
- ZEC futures open interest surged 22% to $303 million in the past 24 hours, boosting select major coins like ENA, BCH, HYPE, ADA, AVAX, and BTC.
- Futures linked to LINK, XPL, and PUMP witnessed capital outflows, reflecting increased investor risk aversion amid volatile market conditions.
- Annualized perpetual funding rates for most major cryptocurrencies, including BTC and ETH, remain near zero, indicating a balanced derivatives market.
- BTC’s order book heat map reveals a concentration of sell orders around $111K in the Binance-listed BTC/USDT perp.
- On the CME, ether futures open interest reached a record 2.43 million ETH, while options open interest stabilized near a lifetime peak of 297K ETH. Conversely, BTC lags in futures open interest at roughly 142K, significantly below the peak of over 200K reached late last year, indicating institutional preference for ETH over BTC.
- On Deribit, flows featured short strangles and call overwriting strategies in BTC, along with some demand for puts as protection against further declines. For ETH, the focus was on near-dated put spreads and calendar spreads.
- Puts in BTC traded at a premium to calls across all tenors, although TH options exhibited bullishness beyond the December expiry.
Market Movements
- BTC is down 2.59% from 4 p.m. ET Tuesday at $108,002.87 (24hrs: -0.51%)
- ETH is down 3% at $3,838.34 (24hrs: -0.98%)
- CoinDesk 20 is down 3.3% at 3,549.42 (24hrs: -0.78%)
- Ether CESR Composite Staking Rate is down 1 bp at 2.83%
- BTC funding rate is at 0.0036% (3.9946% annualized) on Binance
- DXY is unchanged at 99.01
- Gold futures are down 0.7% at $4,080.50
- Silver futures are unchanged at $47.69
- Nikkei 225 closed unchanged at 49,307.79
- Hang Seng closed down 0.94% at 25,781.77
- FTSE is up 0.75% at 9,497.77
- Euro Stoxx 50 is down 0.35% at 5,667.02
- DJIA closed on Tuesday up 0.47% at 46,924.74
- S&P 500 closed unchanged at 6,735.35
- Nasdaq Composite closed down 0.16% at 22,953.67
- S&P/TSX Composite closed down 1.73% at 29,888.82
- S&P 40 Latin America closed down 1.24% at 2,880.55
- U.S. 10-Year Treasury rate is unchanged at 3.955%
- E-mini S&P 500 futures are unchanged at 6,775.50
- E-mini Nasdaq-100 futures are down 0.15% at 25,257.50
- E-mini Dow Jones Industrial Average Index are unchanged at 47,133.00
Bitcoin Stats
- BTC Dominance: 59.75% (unchanged)
- Ether-bitcoin ratio: 0.03568 (-0.21%)
- Hashrate (seven-day moving average): 1,107 EH/s
- Hashprice (spot): $46.57
- Total fees: 2.95 BTC / $324,895
- CME Futures Open Interest: 142,385 BTC
- BTC priced in gold: 25.7 oz.
- BTC vs gold market cap: 7.26%
Technical Analysis
- BTC’s 30-day implied volatility indices have surged past their respective 200-day simple moving averages for the first time since April.
- These breakouts indicate expectations for increased price turbulence over the next four weeks.
Crypto Equities
- Coinbase Global closed at $338.62 (-1.5%), down 2.02% to $331.78 in pre-market.
- Circle Internet closed at $129.85 (-0.73%), down 1.34% to $128.11.
- Galaxy Digital closed at $42.86 (+8.1%), down 5.27% to $40.60.
- Bullish closed at $57.27 (-2.54%), down 2.97% to $55.57.
- MARA Holdings closed at $20.07 (-3.18%), down 2.64% to $19.54.
- Riot Platforms closed at $20.67 (-6.09%), down 2.9% to $20.07.
- Core Scientific closed at $19.23 (+2.23%), down 2.18% to $18.81.
- CleanSpark closed at $18.77 (-7.99%), down 3.89% to $18.04.
- CoinShares Valkyrie Bitcoin Miners ETF closed at $56.01 (-6.29%), down 4.77% to $53.34.
- Exodus Movement closed at $24.68 (-5.55%).
Crypto Treasury Companies
- Strategy closed at $301.91 (+1.79%), down 2.29% to $295.00.
- Semler Scientific closed at $23.51 (-0.59%).
- SharpLink Gaming closed at $14.34 (-3.04%), down 2.51% to $13.98.
- Upexi closed at $5.09 (-11.01%), down 3.54% to $4.91.
- Lite Strategy closed at $1.95 (-1.52%).
ETF Flows
Spot BTC ETFs
- Daily net flows: $477.2 million
- Cumulative net flows: $61.94 billion
- Total BTC holdings ~1.35 million
Spot ETH ETFs
- Daily net flows: $141.7 million
- Cumulative net flows: $14.61 billion
- Total ETH holdings ~6.74 million
Source: RialCenter
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