The crypto market saw another grueling sell-off on Thursday, with several altcoins facing double-digit moves to the downside, while BTC and ETH began to challenge critical levels of support.
The move appears to be a continuation of the weekend’s $500 billion carnage, with traders now acting more cautiously to avoid another potential liquidation cascade.
Derivative positioning
- The BTC futures market continues to stabilize, with Open Interest holding around $25 billion. The 3-month annualized basis has also remained stable, trading in the 5-6% range. However, a notable divergence in funding rates highlights a mixed market sentiment; Binance and OKX now have negative funding rates of -2% to -3%, while other platforms are either flat or slightly positive. This negative funding on major exchanges indicates that a large number of traders are holding short positions, suggesting a degree of bearish conviction despite the stable open interest and fundamentals.
- The BTC options market is showing a strong bullish signal. 24-hour Put/Call Volume is now roughly balanced, indicating steady demand from both sides. However, the most significant metric is the 1-week 25 Delta Skew, which has risen to 12.62%, suggesting that traders are willing to pay a significant premium for call options and are aggressively positioning themselves for a price increase.
- Coinglass data shows $415 million in 24-hour liquidations, with a 70-30 split between longs and shorts. ETH ($115 million), BTC ($80 million) and Others ($43 million) led the way in fictitious liquidations. Binance liquidation heatmap indicates $110,009 as a core liquidation level to monitor in case of a price drop.
Token Talk
By Oliver Knight
- Altcoins were dealt a second day or decimation on Thursday as several assets faced double-digit declines.
- aster and lido (LDO) all fell between 12% and 13% over the past 24 hours, with CoinMarketCap’s “altcoin season” index falling to 27/100, its lowest point in more than three months.
- Crypto majors BTC and ETH are still around the respective levels of support at $110,000 and $4,000, although sentiment has turned bearish after the market failed to recover from last weekend’s $500 billion wipeout.
- One outlier from Thursday’s sale was which rose from intraday lows of $0.312 to $0.322 as it begins to show strength and signs of recovery.
- There are several catalysts behind the recent divestment; especially distribution from long-term holders of bitcoin, which has created an environment of heavy selling pressure combined with a lack of demand.
- Altcoins are often negative beneficiaries of the downside in bitcoin, and liquidity levels, especially after the weekend’s leverage blowout, remain low. This means that when a sell-off occurs, prices will quickly remove levels of support until sufficient liquidity is found to meet demand from sellers.
