The crypto market is at a critical point on Wednesday, with bitcoin priced close to the $75,000 level for support after failing to break through $78,000 on Tuesday.
Ether’s (ETH) chart tells a similar story. The second-largest cryptocurrency by market capitalization declined at $2,150 on Tuesday, falling towards the $2,000 support level. It bounced off $2,050 at 05:30 UTC on Wednesday and recently traded around $2,080.
AI tokens RENDER, FET and NEAR gave back much of their gains from Tuesday’s rally, falling between 1% and 3% since midnight UTC.
The US stock market continued to diverge from crypto on Wednesday, with S&P 500 and Nasdaq 100 index futures both hitting record highs after adding about 0.3%.
Crucially, bitcoin is now below Bitmine (BMNR) Chairman Tom Lee’s line in the sand at $76,000, which he said would signal the end of a bear market should BTC end the month above that level.
Derivatives positioning
- Crypto futures volume surged 54% to $201 billion in 24 hours, while liquidations rose 87%. The massive percentage increases largely reflect the market waking up after an extended US holiday break rather than a structural shift in activity levels.
- Bitcoin fell 1% over the past 24 hours as open interest rose to 740K BTC from 704K BTC, a combination that typically confirms a downtrend in price. The negative 24-hour cumulative volume delta (CVD) shows that traders are aggressively shorting via market orders while funding rates remain neutral.
- Ether’s open interest hit a record 15.57 million ETH along with negative CVD. It may be that traders are shortening contracts in anticipation of a deeper price loss. This follows a technical breakdown of the bullish trend line that has supported the market since February, opening the door for deeper losses.
- Open interest in ZEC futures fell for a third day to 2.30 million tokens as the price fell towards $564. The simultaneous decline in both price and open interest suggests that earlier bullish bets are being closed out rather than opening new short positions.
- Bitcoin’s 30-day implied volatility index (BVIV) rose nearly 3% to 37.35%, marking its first gain in 10 days and a rebound from yearly lows. A continued rise would signal that the market is finally paying for protection against a potential price swing.
- Deribit data shows September $55,000 is the most traded contract in the past 24 hours. It represents a bet that bitcoin will drop significantly by the end of that month. Most of the activity has been clustered around downside protection at various strikes between $70,000 and $76,000.
Token talk
- The CoinDesk Computing Select Index (CPUS) was down 2.2% since midnight UTC following losses across the AI sector. The DeFI Select Index (DFX) also struggled on Tuesday, losing 1.5%.
- A bright spot is hyperliquid (HYPE). The perpetual exchange’s native token made a new all-time high this week and continues to show strength on Wednesday, rising 5.5% since midnight UTC.
- There was also a notable gain for monero (XMR), up 5% on Wednesday as it retests Monday’s high around $400.
- CoinMarketCap’s “Altcoin Season” indicator also rose to 36/100, showing relative strength among a select few altcoins despite broader market weakness.
