Bitcoin pared fresh losses on Thursday after bearing the brunt of soaring energy prices, with Brent crude rising to $114 and Oman crude rising to $150.
European natural gas futures followed suit, rising about 25% to above $78 per MWh on Thursday as Iran attacked key Gulf energy infrastructure following an Israeli attack on its South Pars gas field.
Bitcoin was trading near $70,000 after losing 1.6% since midnight UTC, while ether (ETH) fell 1.7% to $2,160.
The Federal Reserve also had an impact after it left interest rates unchanged in the 3.50%-3.75% range on Wednesday, pausing a rate-cutting cycle to boost the US dollar.
Risk assets tumbled across the board as a result, with Nasdaq 100 futures down about 0.3% since midnight UTC.
Derivatives positioning
- Nearly $600 million in leveraged crypto futures bets have been liquidated by crypto platforms in 24 hours, with longs or bullish plays accounting for most of the tally. The overnight price drop clearly caught bulls off guard.
- Across the industry, futures open interest (OI) is down 5.6% to $106.90.
- Ether futures OI fell 9% as the token’s spot price fell 6%. This combination represents capital outflow.
- Futures tied to tether gold (XAUT) and privacy-focused ZEC saw double-digit declines, indicating investors’ risk aversion.
- Bearish short plays are again in demand as evidenced by negative funding rates for BTC, ETH, BNB, SOL and other tokens. The 24-hour cumulative volume delta for most of these coins is negative, underscoring the position.
- Fear has crept back into the market. Volmex’s BVIV, which measures the 30-day implied or expected price turbulence in bitcoin, has jumped over 5% to 58.36%, ending a week-long decline. The same applies to ether.
- On Deribit, the skews to bitcoin and ether have strengthened, again indicating increased downside concerns.
- Block streams contained a large demand for ether straddles, a volatility strategy. In BTC’s case, traders chased risk returns and set spreads.
Token talk
- Several altcoins were assigned deep moves to the downside on Thursday, most notably bittensor (TAO) and hyperliquid (HYPE), which lost 8.8% and 6.5%, respectively, since midnight.
- The movement in the altcoin market can be attributed to a lack of liquidity in a market that remains fractured after a $19 billion leveraged wipeout in October.
- A few select tokens showed strength despite the broader market pullback. NEO rose 4.2%, and relaunch token ETHFI continued its strong start to the year, adding 1.5% to $0.55.
- CoinDesk 20 (CD20) is in the red after losing around 1% since midnight, while the DeFi Select Index (DFX) and CoinDesk Memecoin Index (CDMEME) are down 1.4% and 2% respectively.
