Bitcoin struggling to regain a foothold above $70,000 as altcoins outperform.
The largest cryptocurrency is little changed over 24 hours, while the broader CoinDesk 20 (CD20) index rose 0.40% even as ether declined. Memecoins lead the gainers, with the CoinDesk Memecoin Index (CDMEME) adding 1.5% as PIPPIN surged 46%.
Tokens linked to artificial intelligence (AI) also performed well. co-founded by OpenAI CEO Sam Altman, rose more than 3% over the past 24 hours, while Virtuals’ VIRTUAL token rose 2.4%. It’s like the “agentic AI”, where AI tools now also perform tasks, the narrative grows.
Still, the crypto Fear and Greed Index still points to “extreme fear” in the market after last week’s selloff.
Meanwhile, mainstream markets steadied, supported in part by Prime Minister Sanae Takaichi’s landslide election victory in Japan. While Japanese bond yields rose after the result, they have since fallen close to pre-election levels. That reduces the risk of trillions of dollars invested overseas moving back to Japan in search of higher returns.
Derivative positioning
- Bearish momentum in BTC futures intensifies as open interest (OI) continues its decline to $15.9 bo;;opm, signaling a deep and prolonged deleveraging phase.
- This shift is most evident in the funding rates on Binance (-7%) and Bybit (-8%), which have collapsed into aggressively negative territory. It is a sign that short sellers are paying a large premium to maintain their dominance. With the three-month basis stagnant at 3%, institutional appetite remains on the sidelines.
- The BTC options market is showing a cooling of extreme defensive sentiment. One-week 25-delta bias is at 16%, while call dominance has returned to 56%, indicating a shift towards bottom fishing.
- The implied volatility (IV) term structure is shifting from extreme retracement towards a hybrid position, suggesting that while short-term protection remains expensive, long-term volatility expectations are stabilizing.
- Coinglass data shows $290 million in 24-hour liquidations, with a 53-47 split between longs and shorts. BTC ($114 million), ETH ($89 million) and others ($16 million) led the way in fictitious liquidations. Binance’s liquidation heatmap indicates $68,160 as a core liquidation level to monitor in case of a price drop.
Token Talk
- Merkle Trade, the largest perpetual futures decentralized exchange on the Aptos blockchain, is shutting down. The exchange disabled new trading positions on Friday and will forcibly close all open positions today.
- Merkle’s native token, MKL, has added 9% in the last 24 hours. It remains redeemable with no withdrawal fees, with a final payout of stake rewards scheduled for February 12th. The token has lost 77% in the past 12 months.
- The move comes less than two years after Merkle raised $2.1 million in a seed round backed by Aptos Labs, Hashed and Arrington Capital.
- Despite handling $30 billion in trading volume since their 2023 debut, the team gave no clear reason for the closure in a post on X last week, noting only that the decision followed “careful consideration.”
