The crypto market was little changed on Thursday with bitcoin and ether (ETH) with gains of less than 1% as investors consolidated after Wednesday’s breakout.
While bitcoin decisively held above the $70,000 level that had rejected earlier rallies, it has failed to deliver an upward shift to $80,000 as some analysts predicted.
Global stocks reacted well to reports that Iran had secretly contacted the United States in hopes of striking a deal to end the war in exchange for curbing its missile production.
The dollar index (DXY) fell as a result, but is up 3.5% since late January as traders try to rationalize potential interest rate changes from the Federal Reserve. A disruption in the Strait of Hormuz would increase inflation and force the Fed’s hand to raise interest rates to keep deposits high.
Bitcoin typically rises when the dollar weakens and falls when the currency is bullish.
Derivatives positioning
- Bitcoin futures open interest (OI) rose, with the figure rising to 680K BTC, the most in nearly two weeks. This pattern confirms the spot price increases.
- Ether’s OI rose to 13.41 million ether, the highest since January 31st. Activity in XRP futures remains muted, with OI holding a recent low below 1.70 billion XRP. The same can be said about Solana’s SOL.
- OI in futures tied to gold tokens Tether gold (XAUT) and continues to fall as cryptocurrencies rise. Investors can rotate money to the majors while the gold price rally stalls.
- Privacy-focused ZEC futures activity is also picking up, with total OI ending a two-month downtrend.
- Annualized perpetual funding rates for bitcoin and ether remain mildly positive, indicating a bullish bias. However, prices remain slightly negative for XRP and SOL.
- Bitcoin and ether’s 30-day implied volatility indices remain stable in recent ranges, indicating market stability. Wall Street’s volatility index, the VIX, has retreated to 21% from Monday’s high of 28%.
- On Deribit, biases in bitcoin and ether options have weakened but persist along with increased activity in higher strike calls or bullish bets.
- Block flows in options highlighted demand for call calendar diagonal spreads on bitcoin and ether.
Token talk
- Layer-1 token MANTRA completed a token migration and relabeling, replacing the old OM token with the MANTRA ticker and implementing a 1:4 redenomination, leading to a 25% increase in the token price over the past 24 hours.
- The bullish privacy token narrative at the turn of the year fell flat on its face in February as ZEC, DASH and XMR entered a deep correction, but monero (XMR) now appears to be bucking that trend, rising 5.2% since midnight UTC and gaining 9.8% over the past week.
- Crypto majors dominated market gains over the past 24 hours, with the CoinDesk 5 (CF5) and CoinDesk 10 (CD10) indexes each rising about 3.1%. The DeFi Select Index and the Computing Select Index rose by 0.4% and 0.7% respectively during the same period.
- If bitcoin can continue to move towards $80,000 and consolidate, the profits could be rolled into more speculative altcoin bets, but for now the market is cautious.
