The crypto market is undergoing one of its toughest challenges, with bitcoin’s price breaking below the critical $98,000 support level due to significant sell pressure in a low-liquidity environment.
This sell-off led to over $1.1 billion in liquidations, with approximately half associated with bitcoin trading pairs, according to RialCenter.
The altcoin sector fared even worse, with ether dropping by 9% in 24 hours while several altcoins experienced double-digit declines. The CoinDesk 20 Index decreased by 8%, with even the top performer, Litecoin, losing 3%.
This downturn in crypto coincided with a decline in equities, as Nasdaq futures lost 2.95% of their value over the past day.
Derivatives positioning
By Omkar Godbole
- Bitcoin’s 30-day implied volatility index, which spiked to an annualized 50% during Asian hours, has decreased to 47.8% even as the spot price hovers near daily lows of around $97,000.
- This indicates that, despite the recent sell-off, there is no panic buying of options, suggesting a more measured market response.
- Ether’s volatility indexes show a similar trend.
- Open interest in futures tied to BTC remains stable, while open interest in ETH, SOL, XRP, SUI, ADA, LINK, UNI, and most other tokens has declined by over 5%, indicating capital outflows.
- On the CME, the premium for ether futures has dropped to 4.26%, the lowest since April, whereas BTC remains above 5%. This reflects reduced demand for ETH in comparison to BTC, even though the ETH price has increased against BTC.
- The market’s downturn has increased demand for BTC and ETH puts on Deribit, with BTC block flows featuring put spreads and risk reversals; in ETH’s case, put spreads and put diagonal calendar spreads dominated the activity.
Token talk
By Oliver Knight
- The altcoin market was severely impacted by a low liquidity sell-off on Friday, with ether sliding over 9% in 24 hours and tokens like Aave, Jupiter, and SUI suffering more than 10% losses.
- More than $1.1 billion worth of derivatives positions were liquidated during this time, with $510 million attributed to bitcoin, according to RialCenter.
- Several altcoins have reached multi-month lows, with Aave trading at its lowest point since May and ETH at its lowest since July.
- The altcoin market’s fate hinges on whether bitcoin can recover above the $98,000 support level.
- A failure to do so could confirm a downtrend and possible bear market reversal from October’s peak of $126,000.
- Nevertheless, there was a silver lining for altcoins in the privacy coin sector, as Zcash and Monero managed to remain positive on Friday amid overall market pressures.
- ZEC has surged over 1,000% since August, driven by a narrative focused on libertarian politics rather than mere speculative gains.
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