The crypto market continued to show weakness on Tuesday morning, largely following a tech sell-off across US stocks and a correction in the price of precious metals.
Bitcoin is trading at $68,000, down 1.25% since midnight UTC, while Nasdaq futures and gold lost 0.55% and 2.4%, respectively, over the same period.
Altcoins also lost ground as popular memecoins PEPE, DOGE and TRUMP led the draw, losing between 3.5% and 4.5%.
The tech sell-off has been driven by fears surrounding artificial intelligence and how it could disrupt multiple industries. Bitcoin has been closely linked to the Nasdaq since February 3, with the correlation coefficient indicator rising from negative 0.68 to positive 0.72 over the past two weeks.
Gold, meanwhile, is trading at $4,928 after failing to establish a support level above $5,000. The precious metal hit an all-time high of $5,600 on January 28 before a historic 21.5% correction over the following four days.
Derivatives positioning
- Crypto futures continue to see capital outflows. Cumulative industry-wide nominal open interest fell 1.5% to $93 billion in 24 hours, hitting fresh multi-month lows.
- Leveraged bets worth $229 billion have been liquidated by exchanges over 24 hours, with longs (bullish plays) accounting for most of the tally.
- Open interest in DOGE futures is down 4%, bucking the trend in most majors. PEPE, LINK and AVAX have seen 3% to 5% declines in open interest.
- Open interest in futures tied to HYPE, the latest outperformer, has fallen to 44.45 million HYPE, the lowest since early December. This likely reflects profit-taking after the token outperformed bitcoin and other majors during the recent crash.
- Market panic has subsided, as evidenced by the sharp decline in bitcoin and ether’s implied volatility indices from monthly highs.
- On Deribit, bitcoin and ether puts continue to trade more expensive than calls, indicating continued downside fears, but the positioning is now no longer as defensive as it was two weeks ago.
Token talk
- Altcoins continue to trail bitcoin as the “bitcoin dominance” metric has now ranged between 57.4% and 60.1% since September.
- Over the past seven days, AI token MORPHO has gained 23.5%, while privacy coin zcash has increased by 19% in the same period.
- Conversely, layer 1 blockchain token layer zero (ZRO) has lost 16% over the past week as it continues to lose momentum after announcing an agreement to partner with Citadel Securities and DTCC.
- The relative weakness of several altcoins continues to persist on lower time frames, with HYPE, SUI and ASTER all losing between 3% and 4.8% since midnight UTC as the crypto market waits for a bullish catalyst.
