The crypto market is on the verge of a major breakout with bitcoin traded at $78,000, the level it failed to break on Friday and a price it has not topped since January.
A break above this level will trigger upward momentum to $80,000 as futures positions of $180 million need to be liquidated between $77,000 and $78,000, according to CoinGlass’ liquidation heatmap.
However, there is also a $71 million long position that will be liquidated if the price does not rise and fall back below $77,300, creating a defensive trading environment on both sides.
The market is higher after US President Donald Trump extended the ceasefire in Iran, saying the country’s government was “severely broken”.
Nasdaq 100 futures and S&P 500 futures were up 0.77% and 0.6%, respectively, since midnight UTC following the announcement, suggesting an improvement in broader market sentiment.
Derivatives positioning
- BTC’s breakout to $78,000 surprised the bears, leading to $286 million in market-wide short liquidations on derivatives exchanges. Longs, or bullish plays, suffered liquidations of just $132 million.
- Still, total crypto futures open interest (OI) has increased by over 4% to $126 billion in 24 hours. In particular, OI grew across the major tokens, including bitcoin and ether (ETH), outstripping spot price gains, indicating renewed capital inflows and increasing demand for leverage.
- Funding rates have turned positive for most tokens, including BTC, indicating a renewed bias for bullish bets. The 24-hour cumulative volume delta also paints the same picture.
- The M-token stands out with annual funding rates above 200%, signaling an overheated market filled with bullish bets. Meanwhile, the HYPE and XML markets are showing a bias towards bearish short plays.
- Broadly speaking, the activity in crypto futures suggests the possibility of further market gains. Bitcoin and ether’s 30-day implied volatility index also supports the bull case, which remains under pressure, pointing to market calm.
- On Deribit, reversals of bitcoin and ether risk continue to print negative values across all timeframes. It is indicative of the wealth of protective put options relative to calls.
- Block flows contained investor bias for call ratio spreads, a strategy used by traders to take advantage of a moderately bullish, sideways or slightly rising market. Traders also chased bitcoin and ether straddles, a volatility strategy.
Token talk
- The altcoin market was also in buoyant mood on Wednesday, with all major CoinDesk indices showing gains of at least 1.5% since midnight UTC.
- The CoinDesk MemeCoin Index (CDMEME) was the best performer, up 3.4%, with one person turning $575 into more than $1 million on newly released token ASTEROID.
- Popular memecoins TRUMP and DOGE added 6% and 3.8% respectively, reflecting broader optimism across the sector.
- There was also a boost in privacy coins DASH and XMR, both of which rose 6%-7% over the past 24 hours before falling slightly since midnight.
- CoinDesk’s overnight rate (CDOR) for USDC rose to its highest level since 2024, reaching 15%. CDOR measures stablecoin lending and borrowing activity on the Aave platform, which spiked after the weekend’s $290 million leverage on KelpDAO. A high interest rate reflects high demand.
