Bitcoin traded little changed on Wednesday after rising yesterday as the dollar weakened. Ether gave up some of his gains.
Instead, gains came from other parts of the altcoin market. Hyperliquid’s native HYPE token extended gains, adding 11% since midnight UTC, and Solana liquid staking token rose 32%, its biggest one-day gain since December 2023, according to CoinDesk data.
The dollar index ( DXY ) fell to a four-year low on Tuesday, crucially below a trend line dating back to 2011, despite an attempt by President Donald Trump to reassure markets by saying the dollar is “doing well” and that he is not “concerned.”
Dollar strength or weakness has a direct impact on the crypto market because the majority of assets are traded against the US currency. The inverse correlation was a major talking point in the previous bear market, where the dollar rose 22% between November 2021 and October 2022, while bitcoin lost more than 70% of its value.
Derivatives positioning
- An additional $230 million in leveraged bullish crypto futures positions were liquidated in the past 24 hours, extending the trend of consistent long-side wipeouts since Monday.
- Bitcoin and ether 30-day and one-day implied volatility indices remain under pressure, a sign that traders do not expect major turbulence even as the Fed’s interest rate decision looms.
- The theoretical open interest (OI) in futures linked to the HYPE token has increased by over 20% in dollar terms in 24 hours. It largely reflects price gains in the token because in token terms it remains largely unchanged near 57 million HYPE.
- OI in BTC, ETH, XRP and BNB are up 2%-4%.
- Apart from ZEC and TRX, annualized funding rates for the majors remain positive, indicating a bullish positioning bias.
- On Deribit, the BTC and ETH sets continue to trade at a premium to calls. Activity has increased in BTC put options at the $85,000 strike, indicating a demand for downside hedges.
- Block flows in BTC have been mixed, with traders chasing both put and call spreads. In ETH’s case, straddles and risk reversal were in demand.
Token talk
- While HYPE and JTO are among the top performers on Wednesday, the biggest altcoin gainer goes to PIPPIN, a Solana-based memecoin and autonomous AI agent created by AI innovator Yohei Nakajima.
- PIPPIN is up 64% in the past 24 hours and is the most bought token by “smart money” investors, according to Stalkchain.
- Decentralized exchange tokens and asters also started to move higher, with the former up 3.11% since midnight UTC for a 24-hour gain of 10.9%, while ASTER is trading at $0.69, up 5.7% since Tuesday morning.
- CoinDesk indexes also indicate altcoin strength: The bitcoin-dominant CoinDesk 20 (CD20) index is up 2.47% in the past 24 hours and 2.38% since the turn of the year, while the altcoin-heavy CoinDesk 80 (CD80) has outperformed its counterpart, up 3.7.3% since Jan. 1.
- The buoyant sentiment across the altcoin sector comes as bitcoin remains stuck in a tight trading range — historically a bullish period for altcoins because capital is often rotated into more speculative bets until bitcoin makes a decisive move one way or the other.
