Crypto markets rallied on Wednesday as oil briefly dipped below $100 a barrel after US President Donald Trump said the war in Iran will end in “two to three weeks”.
Bitcoin is trading at $68,500 after rising 0.4% since midnight UTC and 3.1% over the past 24 hours, while ether (ETH) is back at $2,130 after a brief stay below $2,000 last week.
The broader crypto market remains in a downtrend dating back to October, although sentiment has changed slightly after a period of consolidation between $62,500 and $75,000 since early February.
A selection of altcoins have performed particularly well, notably algorand (ALGO), which is up 22% in the past 24 hours as it bounces back from oversold territory.
Derivatives positioning
- The crypto futures market appears to be rumbling rather than building clear directional positions, as trading volume has surged 23% to $210 million over the past 24 hours, while open interest has been largely stable at around $106 billion.
- Open interest in major USD- and USDT-denominated futures has clearly detracted from BTC’s recovery from weekend lows around $65,000. This suggests that the rally has not been driven by a meaningful build in leveraged positions, but rather by spot demand or short covering, pointing to a lack of strong conviction behind the move.
- Ether’s OI has risen slightly along with its spot price, signaling participation from leveraged traders.
- ETH and ZEC stand out as major coins with positive OI adjusted CVD and funding rate. This combination points to aggressive bidding in the futures market, where traders actively open long positions and pay a premium to maintain them.
- The market for ADA, XMR, BCH and SHIB suggests otherwise.
- Bitcoin and Ether implied volatility indices continue to show a picture of calm.
- On Deribit, risk reversals continue to show a bias for BTC and ETH put options, which offer protection against price declines. Bearishness is slightly more pronounced in BTC options.
Token talk
- The CoinDesk Computing Select Index (CPUS) was the best-performing benchmark on Wednesday, up 2.7% since midnight UTC, while the CoinDesk Smart Contract Platform Select Capped Index (SCPXC) and DeFi Select Index (DFX) are up 1.5% each.
- Bitcoin and major-dominant CoinDesk 5 (CD5) and CoinDesk 20 (CD20) are up 0.35% and 0.69%, respectively, indicating underperformance relative to the broader altcoin market.
- Algorand (ALGO) led the market gains on Wednesday, but it was closely followed by decentralized finance (DeFi) tokens MORPHO and JUP, which posted double-digit gains.
- A disproportionate increase in open interest in assets such as ETH and ZEC suggests that the recent move has been supported by leverage as opposed to spot buying, which could relax on news contrary to Trump’s statement released this week.
