The crypto market consolidated on Tuesday with bitcoin and ether trade at $105,000 and $3,550 respectively.
Traders watch prices to see if they make a lower high, signaling a downtrend, or continue to rise.
A drop below $98,000 for bitcoin would confirm the bearish scenario, while a move above the November 2 high of $111,000 would present a bullish outlook.
Recent volatility in the crypto market has been driven by dollar strength, with the DXY index rising from 96.2 on September 18 to 99.58 as indecisive comments from the Federal Reserve provide little guidance on cutting US interest rates.
Derivatives positioning
By Omkar Godbole
- The BTC and ETH 30-day implied volatility (IV) indices are hovering within recent ranges, suggesting an ongoing phase of market calm, in line with Wall Street’s VIX index, which has erased the October rally.
- Still, the golden cross on BTC’s IV suggests that the path of least resistance for volatility is on the higher side.
- On Deribit, both BTC and ETH puts remain more expensive than front-end calls. However, demand for downside protection in BTC is stronger than ETH.
- Block flows over OTC desk Paradigm included a long position in the November 29 BTC expiration set at the $80,000 strike price and demand for the November 21 expiration call at the $110,000 strike.
- In the futures market, open interest (OI) in UNI contracts has risen 80% in 24 hours, signaling increased participation in the price increase from leveraged traders. OI in XRP has increased by 5%, while it is decreasing for most top 10 currencies, including BTC and ETH.
- On CME, OI in ether futures has pulled back sharply to 2.10 million ETH.
Token talk
By Oliver Knight
- The altcoin market cooled on Tuesday, putting ice on a weekend rally that carried over to Monday after US President Donald Trump announced a $2,000 dividend for some US citizens.
- Uniswap’s original UNI token outperformed the broader market after a proposal was made to burn millions of tokens, theoretically reducing supply and driving up the price. UNI rose more than 20% after the proposal was announced before the consolidation.
- The same kind of optimism was not possessed by those trading the recently released canton network (CC) token. Despite being backed by TradFi giants such as Goldman Sachs (GS), HSBC (HSBC) and Broadridge (BR), the token fell 33% on its debut.
- It now trades at a market cap of $3.8 billion, despite only having $55 million in 24-hour trading volume, according to CoinMarketCap.
- Promoted as a layer-1 blockchain for institutions, the Canton Network reached more than 500,000 daily transactions in September, according to data provided by crypto custodian Copper.
- The stuttering debut mirrors the bearish start of Plasma’s XPL token in October. It dropped from $1.67 to $0.28 a month after going live. XPL fell another 11.5% in the past 24 hours.
- The direction of the broader altcoin market will now depend on whether bitcoin and ether can continue to break out of danger and establish new levels of support. Rejection at these levels would create another lower high to confirm a downtrend from the October highs.
