Crypto markets opened the week under pressure, extending losses after a volatile weekend like bitcoin showed tentative signs of stabilizing below $70,000.
Although the largest cryptocurrency fell more than 2.8% over the past 24 hours, it is still well off its recent lows of around $60,000. Still, it has struggled to regain momentum after last week’s steep decline that fueled debate over whether the market has entered a deeper bear phase or is nearing a bottom.
Bitcoin bulls pointed to slowing down moves as a sign of exhaustion, even as critics took victory laps. Nevertheless, attention is turning to software stocks, some of which started to rise on concerns about a deeper ease of collapse.
The CoinDesk 5 Index (CD5) fell 3.4%, with all five of the major cryptocurrencies falling. Ether fell around 5% and underperformed bitcoin as traders reduced risk across major tokens but held above psychological support at $2,000. The broader CoinDesk 20 (CD20) index is down 3.7%.
Derivative positioning
- BTC futures are seeing a clear bearish shift after open interest (OI) fell from $19 billion to $16 billion over the past week, marking a period of sustained deleveraging.
- Funding rates on Bybit (-2.24%) and Binance (-0.5%) have turned neutral-to-negative, signaling that short sellers are now leading the narrative. With the 3-month basis compressed to 3%, institutional demand has cooled, reflecting a broader derivatives landscape dominated by risk-off sentiment.
- Options data confirms this defensive shift, with one-week 25-delta bias for BTC rising to 20% and call dominance falling to 48%.
- The implied volatility (IV) term structure is now in extreme backwardation, with front-end volatility at 85.03% dwarfing long-term expectations (~50%). That’s a massive premium for immediate protection against short-term price declines.
- Coinglass data shows $397 million in 24-hour liquidations, with a 45-55 split between longs and shorts. BTC ($234 million), ETH ($74 million) and SOL ($14 million) led the way in fictitious liquidations.
- The Binance liquidation heatmap indicates $68,160 as a core liquidation level to monitor in case of a price drop.
Token Talk
- Crypto wallet Rainbow debuted its RNBW token last week, but the launch was not smooth.
- The Ethereum-based project introduced the token on the layer 2 network Base, where the price dropped to $0.025, a 75% drop from its $0.10 initial coin offering (ICO) just two months earlier. It has since risen to $0.031
- That drop wiped out expectations from speculators betting on a $100 million fully diluted valuation (FDV). At Polymarket, the odds on that bet hit a nearly 80% high earlier this year. FDV now hovers closer to $31 million.
- At the heart of the chaos were delays in token distribution to early buyers and participants in Rainbow’s onchain rewards program. Some users said they had not received their airdropped tokens hours after launch.
- Rainbow co-founder Mike Demarais blamed backend infrastructure that snapped under demand. US-based investors will not be able to fully access their tokens until December 2026, according to vesting terms.
- Rainbow raised $18 million in a 2022 Series A led by Reddit co-founder Alexis Ohanian’s company, Seven Seven Six. The wallet is known for gamified features and a points system linked to the RNBW token.
