The crypto market is heading for an overnight sell-off in bitcoin trading lower at $69,400 after losing 2.6% since midnight UTC and ether (ETH) heading back towards $2,000 after falling 4.1%.
The falls come alongside a sharp fall in US stocks and precious metals. Nasdaq 100 futures are down about 1%, while gold has lost 1.8%.
Oil, meanwhile, climbed back above $100 a barrel as supposed peace talks between the US and Iran stalled.
The altcoin market was the worst hit, with the CoinDesk Computing Select Index (CPUS) and CoinDesk DeFi Select Index (DFX) down 4.3% and 3.9% respectively during the Asia session.
Zooming out, bitcoin and the broader crypto market are still locked in a price range that has persisted since early February despite several attempts to break out to the upside.
Derivatives positioning
- An impasse in negotiations between Iran and the US appears to have triggered renewed risk aversion, leading to capital outflows from crypto derivatives. Cumulative crypto futures open interest (OI) is down 3.5% to $108.30 billion.
- OI in PAXG fell nearly 11% in 24 hours, with the gold price down 1.8% to $4,423 per ounce. ounces. DOGE, ZEC and TAO are other big OI losers.
- Some traders may have shorted BTC futures on major exchanges as prices fell below $70,000 during European hours. This is evident from the small increase in OI in major dollar and USDT denominated exchanges to 232K BTC from 229K BTC.
- ETH, BNB, XPR, SOL, TRX and DOGE are experiencing negative fund returns, a sign of increased bias for bearish, short positions.
- Meanwhile, CC, TRX and BCH stand out with positive cumulative volume deltas pointing to positive positioning, while other majors including BTC are seeing seller dominance.
- In the options market, some traders are chasing downside protection in ether by buying risk reversal, a position that involves selling calls to finance the purchase of put options, TDX Strategies said in a market note.
- On Deribit, BTC and ETH puts remain more expensive than calls across all tenors. On the front end, ether puts are more expensive than BTC’s, a sign that traders are bracing for a bigger downside in ether in the near term.
Token talk
- The crypto market is red across the board on Thursday, but some tokens fared worse than others; AI-focused FET is down 7.7%, while ETHFI and RENDER have given back much of the past week’s gains, falling 6.3% and 5.9% respectively.
- The “Altcoin Season” index is still at 48/100, suggesting that a bullish recovery may be on the cards if the market can find support and consolidate.
- About half a dozen tokens out of the top 100 remain in the black over the past 24 hours, these include ethena (ENA), up 2.2%, and tier-1 network tokens XDC, NIGHT and TRX, all between 1% and 2% higher.
- Overall, worryingly low liquidity that has failed to recover since late 2025, coupled with the fickle nature of crypto retailers, could create the perfect storm across the altcoin market, resulting in an exaggerated downturn.
