The crypto market continued to establish new levels of support on Thursday with bitcoin trades around $103,000 while ether rose less than 1% to $3,500.
The average crypto relative strength index (RSI) remains in neutral territory, while the fear and greed index prints 25/100, indicating negative sentiment across the market.
There was a little more action in the altcoin market. AERO fell 18% in the past 24 hours following an announcement of a merger with Velodrome, while STRK and FET also made double-digit moves to the downside.
XRP led gains among the major cryptocurrencies, rising 3.5% following a wave of activity in the options market.
The market needs a catalyst before confirming a potential downtrend from October’s record high, or a potential bottom around $98,000. The dollar remains relatively strong around 99.8; a break above 100 would put pressure on risk assets like the crypto sector.
Derivatives positioning
By Omkar Godbole
- Despite the news of the US government reopening, the BTC and ETH 30-day implied volatility indices from Volmex remain within their recent elevated ranges, highlighting persistent structural issues that continue to keep volatility expectations high.
- Futures markets continued to de-risk. Bitcoin open interest (OI) fell 3.58% to $66.14 billion, with liquidations totaling $186.47 million. Most of these were long-term traders betting on a price rise.
- OI in SOL, HYPE and DOGE also declined, while ZEC futures saw capital inflows, lifting OI by 4%.
- On the CME, the annual three-month premium in ether futures fell below 6%, representing a discount to the BTC premium for the first time in weeks. This does not necessarily imply relative bearishness in ether, it may reflect increased cash and carry arbitrage in the second largest cryptocurrency.
- On Deribit, choke accounted for 27% of the total BTC block option flow in the last 24 hours. It is a sign of increasing bias for non-directional strategies that bet on the degree of price volatility. That’s how it’s been for the past week.
- In the case of ETH, two of the most popular strategies are putting diagonal calendar and call calendar spreads.
- Broadly, BTC and ETH options continue to show a bias for puts, which offer downside protection, in the short term.
Token talk
By Oliver Knight
- The altcoin market continued to consolidate on Thursday after what has become an extended period of low-volatility price action.
- CoinGlass data shows open interest across all crypto markets fell 1.13% to $142 billion, while 24-hour volume rose 25% to $328 billion, showing a preference for spot trading over derivatives.
- Ether traded slightly changed while tokens including solana Bnb and all were in the red by between 0.2% and 1.8%.
- AERO, the token linked to Base’s leading decentralized exchange (DEX), Aerodrome, lost 18.2% after rallying on Wednesday.
- The relative volatility can be linked to an announcement that the company is upgrading its protocol infrastructure to support EVM-compatible extensions, integrating with Circle Internet’s Arc blockchain and wider “MetaDEX” hubs, expanding its ecosystem reach and capacity.
- Aerodrome also said it will merge with Velodrome and become a single-token protocol. AERO holders will get 94.5% of the new token and VELO holders 5.5%.
- and the FET token also showed sharp declines – 13.8% and 11% respectively – although both remain significantly up during the week.
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