The crypto market saw a “sell the news” reaction to the Federal Reserve’s interest rate cut and a US-China trade deal with bitcoin sliding back to the $110,000 level of support.
Traders will now wonder if the recent high of $116,000 will mark a lower high from the record $126,000 bitcoin hit at the beginning of the month, which would indicate a downtrend and a reversal.
Bitcoin dominance ticked down a few basis points on Thursday to suggest that some altcoins are outperforming BTC despite market weakness reflected across the crypto majors.
Derivative positioning
By Saksham Diwan
- Despite yesterday’s post-Fed news price drop in bitcoin, the BTC futures market is showing strength: Open interest (OI) is up slightly to $27.2 billion, confirming minimal liquidations and quick buyer re-entry.
- Crucially, the highly polarized funding rates have normalized and are now trending neutral and close to flat across most venues. This signals underlying market resilience and a less volatile, more measured sentiment compared to the earlier uncertainty.
- The BTC options market maintains a strong bullish lean, although short-term conviction has moderated.
- The implied volatility (IV) term structure still exhibits short-term backwardation before transitioning to long-term contango. One-week 25-delta bias has fallen to 8% from 10% yesterday, but traders are still paying a significant premium for short-term call options.
- This reduced conviction is reflected in the 24-hour put-call volume ratio, which remains bullish at 55:44 in favor of calls.
- Coinglass data shows $821 million in 24-hour liquidations, with a 79-21 split between longs and shorts.
- BTC ($368 million), ETH ($188 million) and others ($52 million) led the way in fictitious liquidations. The Binance liquidation heatmap indicates $109,700 as a core liquidation level to monitor in case of a price drop.
Token Talk
By Oliver Knight
- More than $80 billion was wiped off the total crypto market cap in the last 24 hours as traders “sold the news” following the Fed’s interest rate cut and a US-China trade deal.
- Bitcoin and ether the two largest cryptocurrencies, are both down 2.5% as they struggle with levels of support. XRP and XLM were the worst performing tokens out of the top 20, losing 3.5% and 3.3% respectively.
- Plasma continues to make headlines for the wrong reasons, tumbling 14% in 24 hours to compound an overall loss of 81% since September 28.
- A glimmer of optimism across the altcoin market was TRUMP, the memecoin backed by the US president, which surged 6.8% after reports emerged that Fight Fight Fight, the company that manages the token, plans to acquire US fundraising platform Republic.
- TRUMP is now up 45% this week, although at $8.40 it is still well below the all-time high of $45.47.
- Bitcoin dominance ticked down slightly from 59.3% to 59.0%, suggesting that some altcoins are outperforming bitcoin in this recent period of selling pressure.
