The crypto market suffered a sell-off on Tuesday with bitcoin approaching the lowest level since June and ether traded at $3,480, the lowest since August.
The selling pressure led to about $1.4 billion in liquidations across derivatives exchanges, which at press time are doing better than they did in October, when Binance’s auto-degearing engine wreaked havoc by liquidating large numbers of traders.
One of the catalysts for the sell-off is dollar strength, with the DXY index hitting 100 for the first time since July after rising 96.2 in September.
The dollar rises as analysts suggest the Federal Reserve will slow its rate-cutting cycle. This has led to a bearish turn in risk assets like bitcoin and the broader crypto market.
Derivative positioning
By Omkar Godbole
- Volmex’s Bitcoin Volatility Index, BVIV, which represents the 30-day implied or expected price turbulence, is rising after the golden cross of its 50- and 200-day moving averages.
- BTC’s spot price has developed a negative correlation with volatility over the past year, meaning that further increases in BVIV could be marked by price weakness.
- Positioning in ZEC remains high, with open interest (OI) near lifetime highs of around 1.59 million ZEC. However, funding rates have turned bearish, a sign that some traders are shorting futures, possibly against long spot positions.
- On the CME, futures linked to BTC and ETH continue to diverge, with activity mainly concentrated in ether futures, where OI remains close to record highs.
- On Deribit, BTC options show a bias for puts across all timeframes, a sign of persistent downside. Ether options show bullishness after February 2026 expiration.
- OTC flows across Paradigm contained demand for November 7 expiration ether set at the $3,500 strike.
Token Talk
By Oliver Knight
- The altcoin market suffered a torrid Asia session with several tokens falling more than 15%, resulting in a $1.37 billion liquidation wave, according to CoinGlass.
- HyperLiquid Rival Aster led the decline, falling 18% to $0.88. Interestingly, that’s below the price paid by Binance founder CZ, who announced a $1.8 million purchase at $0.90 over the weekend.
- “Every time I buy coins I’m stuck in a losing position, 100% record,” CZ wrote on X on Tuesday.
- Numerous tokens included now finds itself back at critical levels of support that led to a bounce two weeks ago, although it’s worth noting that the likes of solana and GDP has fallen to fresh lows.
- One sector that has outperformed the broader market has been privacy coins, with and both still in the green for the month.
- On Tuesday, there were also extraordinary rallies and two tokens considered by some to be “dino coins” as they were launched in 2017 and 2014 respectively. Both tokens have privacy features and appear to run on XMR and ZEC.
- DCR is up 146% while DASH is up 65% on significant volume, showing that traders may be rotating away from the weaker broader market.
