The crypto market experienced a rare period of volatility in Asian hours on Monday with bitcoin falling more than 5% to $64,270 shortly after midnight UTC before bouncing back to $66,300 at 11:00 UTC.
The sale and subsequent termination mirrored the action in US stocks. Futures, which track the S&P 500 index, fell 0.84% after opening on Sunday night before starting to recover five hours later.
Gold futures did the opposite, rising at Sunday night’s open to their highest since Jan. 30, before giving back some of those gains during European hours. Silver trailed the more expensive metal.
The rise in precious metals, along with weak performance in risk assets, comes after US President Donald Trump said he planned to impose new 15% global tariffs on trading partners and increased US military presence near Iran fueled a rush to safe havens.
Altcoins succumbed to low liquidity conditions overnight as solana (SOL) and fell between 7% and 8% before both rebounded during European hours, a move that led to $270 million in altcoin liquidations, according to CoinGlass.
Derivatives positioning
- Demand for leveraged products remains weak, as evidenced by total open interest for crypto futures staying below $100 billion for over two weeks.
- Liquidations don’t help either. In the last 24 hours, crypto futures bets worth $500 million have been forcibly closed by exchanges due to a lack of margin.
- Traders continue to put capital into futures linked to tokens linked to traditional assets such as gold. For example, open interest in Tether gold (XAUT) futures is up 14% in 24 hours, even as BTC, ETH, SOL, HYPE, DOGE and others continue to see capital outflows.
- ZEC and CRO are the only tokens that boast a 24-hour positive cumulative volume delta (CVD), a sign of buyer dominance. Meanwhile, BTC and other majors have negative CVDs, a sign of selling pressure overwhelming buyers.
- Bitcoin’s 30-day implied volatility index, BVIV, has risen 9% to over 60%, indicating renewed jitters.
- Traders chased bitcoin put options at the $58,000, $60,000 and $62,000 levels as Trump’s new tariffs injected fresh uncertainty into the market.
- On Deribit, bitcoin and ether are trading at a premium to calls across all timeframes, indicating continued downside fears.
Token talk
- The altcoin market remains in the red on Monday after an exaggerated sell-off was triggered by weakness in bitcoin and US stocks.
- Low liquidity conditions saw pump.fun’s native PUMP token shed 8.5% of its value before staging a bounce, while layer zero (ZRO) began selling off early Sunday, losing 16.5% over 24 hours before recovering at 04:00 UTC.
- A small number of tokens outperformed the broader market. Retaking token ETHFI rose more than 10% from Monday morning’s lows.
- Telegram-linked toncoin (TON) showed more stability overnight, falling just 3.6% before jumping 4.9%.
- CoinDesk’s DeFi Select Index (DFX) was the best-performing benchmark over the past 24 hours, losing just 1.84%, while the CoinDesk Smart Contract Platform Select Index and CoinDesk Computing Select Index lost 3.56% and 3.23%, respectively.
- The altcoin market has largely tracked bitcoin in February, however, with a lack of liquidity leading to exaggerated moves. If bitcoin can set a local low and bounce back above $70,000, for example, several altcoins are poised for extended upside after order books were wiped out in early February.
