The crypto market has pulled higher after last week’s selloff, with BTC and ETH testing major levels of support.
BTC is now trading around $111,000, while ether is back above $4,000. There are also glimmers of strength in the altcoin market; with LINK up 14% and FLOKI gaining 27% over the past 24 hours.
Sentiment is improving after last week’s liquidation cascade that temporarily wiped $500 billion from the crypto market. However, BTC and ETH both need to remain above their respective support levels of $110,000 and $4,000 to avoid a continuation of the downtrend, which could accelerate as liquidity is low compared to earlier this month.
Derivative positioning
- BTC options positioning remains strongly bullish with a put-call open interest ratio of 0.66 and a large build-up at the $140K strike, where over $2.4B in notional call exposure is concentrated. This indicates that traders continue to price upward momentum into the end of the year, even as spot volatility increases.
- Total open interest on bitcoin Deribit options has risen to 427,746 contracts, marking an annual high. The December 26 expiration dominates ($14.3bn theoretical), suggesting traders are extending bullish bets further out on the curve while maintaining tactical flexibility in shorter options.
- ETH options show similar positioning, with call dominance around the $4K-$4.5K strike and increasing open interest at the end of December expiration, reflecting BTC’s structure.
Token Talk
By Oliver Knight
- A rise in value across several altcoins, particularly popular memecoin floki, resulted in an improvement in sentiment across the crypto market on Monday, although CoinMarketCap’s altcoin seasonal index remains at 26/100, indicating investors’ preference for bitcoin over speculative bets.
- Bitcoin dominance, a metric used to assess how much of crypto’s total market capitalization is attributable to BTC, is at 58.8%, up from this time last month when it was at 57.2%.
- While there were signs of recovery on Monday, several altcoins are still significantly lower than they were a week ago. Synthetix is down 30%, while others including FET, ASTER and BNB all face losses of between 15% and 25%.
- One of the drivers of positive sentiment on Monday was LINK, which surged 14% after a number of wallets collectively withdrew $116 million in tokens from Binance, indicating accumulation after last week’s crash.
- The average crypto Relative Strength Index (RSI) is at 54.2/100, suggesting that the market is in a state of limbo as it moves away from key levels of support, but is still far from challenging major resistance levels.
