The crypto market extended its tight trading range on Tuesday, constrained by a low volume and low liquidity environment.
Daily trading volume for bitcoin down 25% to $35 billion over the past 24 hours and ether volume shrank 21% to $24.6 billion.
A drop in volatility can be attributed to general apathy in the crypto market, which has occurred alongside a euphoric rally in precious metals.
Gold is currently trading at $5,085 after hitting a series of record highs over the past week, while silver is up more than 57% since the turn of the year as traders flock to the asset.
The rotation to metals can be clearly seen on derivatives exchange HyperLiquid, where silver futures are now approaching $1 billion in daily volume. That’s more than all other assets except bitcoin and ether, though it’s worth noting that funding rates exhibit a negative skew to suggest traders are shorting strength as opposed to buying a potential top.
With US President Donald Trump issuing new tariffs of 25% on South Korea on Monday after a political showdown with the EU over Greenland last week, the risk vote may well continue further
Derivatives
- Over $270 million in leveraged crypto futures bets have been liquidated by exchanges in 24 hours, with bearish bets (shorts) accounting for most of the tally. The figures show traders were positioned for a deeper, market-wide decline after last week’s 7% drop in bitcoin and have been caught off guard by the rise from $86,000 to nearly $88,000.
- Volmex’s 30-day bitcoin and ether implied volatility indices remain near multi-month lows, indicating no signs of panic or fear, although flows and technical charts paint a bearish picture.
- Open interest (OI) in futures linked to Hyperliquid’s HYPE token rose 30% to over 57 million HYPE, approaching December’s all-time high of 57.44 million HYPE. The decentralized exchange is said to have regained market share from rivals Aster and Lighter.
- OI in ETH, SOL, XRP and DOGE have increased 2% to 3%, while BTC’s OI has remained unchanged.
- Annualized perpetual funding rates for most majors remain moderately positive, a sign of bullish bias, but nothing out of the ordinary. Prices for TRX and DOGE have turned negative, indicating a dominance of shorts.
- On Deribit, BTC and ETH continue to trade more expensive than calls, a sign of continued concern about a decline. According to some observers, downside protection is now a crowded trade and calls look relatively cheap for those with a bullish market thesis.
- Bearish directional positioning such as put spreads and volatility bets, straddles and strangles, cumulatively account for nearly 50% of all BTC block trades over 24 hours. In ETH’s case, traders preferred the iron condor, a strategy to take advantage of a potentially range-bound market.
Token talk
- Impressive volume in the silver futures market has lifted HYPE, HyperLiquid’s native token, by more than 22% in the past 24 hours as trading volume more than doubled to $510 million.
- Privacy coins zcash and Monero up 4% and 3% respectively since midnight UTC, outperforming bitcoin and crypto markets ETH, XPR and SOL, which were all down 0.4%-1%.
- Pump.fun’s native PUMP token experienced significant gains, rising 14.5% since midnight as traders and token traders sought to extract value from the memecoin market despite broader market stability.
- January trading volume on Pump.fun has already surpassed $10 billion, reaching its highest level since June with four days left in the month, according to DefiLlama.
- The bitcoin-dominant CoinDesk 20 Index (CD20) is little changed since the start of the year, while the CoinDesk 80 (CD80), heavily weighted to altcoins, is up 3.6%.
