The crypto market fell for a second day on Tuesday with bitcoin and ether (ETH) have both lost around 0.75% since midnight UTC.
The drop comes after bitcoin twice failed to break above the $80,000 resistance level over the past week, with the latest attempt occurring in Asian hours on Monday.
The cheer from last week’s jump to $79,500 from $70,000 has begun to fade as several key price indicators turn bearish, including the Coinbase Premium index turning negative, a signal of waning demand from US investors.
US stocks are also set to open lower on Tuesday, with Nasdaq 100 futures trading 0.5% lower since midnight UTC, while the US dollar index ( DXY ) is up 0.25%.
Stalled peace talks between Iran and the US continue to drive the traditional markets, with Brent crude now well above $105 a barrel. barrel.
Derivatives positioning
- Across the market, crypto futures open interest (OI) has fallen over 1% to $120 billion in the past 24 hours. That’s alongside a 3% drop in trading volume and an 8% drop in liquidations, suggesting a slight cooling in market activity. Fewer open positions, lower participation and reduced forced liquidations generally indicate less aggressive trading.
- Bitcoin’s options-to-futures open interest ratio has fallen to 57.5%, the lowest since January 31. It is a sign of renewed bias for directional bets and higher short-term volatility.
- Bitcoin futures OI fell to 723.54 BTC, down over 9% from a recent high of 796.71 BTC. This decline comes alongside persistently negative funding rates, which is usually a sign of bearish positioning. But this time they stem from institutional hedging and not outright bearish bets.
- DOGE’s open interest stands out, having risen 6% over the past 24 hours, outperforming other major cryptocurrencies. The OI of 14.39 billion tokens is the highest since October 10, indicating strong capital inflows. Positive funding rates and a rising 24-hour cumulative volume delta suggest that traders are increasingly positioning for potential upside.
- SOL and ADA have the most negative 24-hour cumulative volume deltas (CVD), indicating that more trades are initiated by market sellers making bids than by market buyers raising offers. It shows aggressive selling pressure even if a buyer matches every seller.
- Bitcoin and ether’s 30-day implied volatility indices are hovering at three-month lows, indicating subdued market pricing of risk amid macro pressures such as elevated oil prices and unresolved US-Iran peace talks. As Deribit says, “Bargaining game theory in the Middle East has lulled the BTC Spot market into a deep slumber.”
- On Deribit, risk returns in options show that the trade is at a premium in both BTC and ETH, with BTC puts being significantly more expensive than ETH puts. The pricing points to a bullish outlook for the ether-to-bitcoin ratio.
- In terms of flows, the $80,000 bitcoin stake has been the most actively traded in 24 hours, both in volume and open interest. Meanwhile, block streams contained risk reversals and put spreads in BTC and put spreads and straddles in ether.
Token talk
- The altcoin market underperformed bitcoin on Tuesday, as shown by CoinDesk’s Memecoin Select Index (CDMEME) and DeFi Select Index (DFX), which fell 1.6% and 1.2%, while the bitcoin-dominant CoinDesk 20 (CD20) benchmark lost just 0.8%.
- Privacy token zcash (ZEC) was the worst-performing altcoin in the CoinDesk 100 (CD100), losing 5.6% since midnight UTC, closely followed by CHZ and HYPE, which fell 3.9% and 3.5% respectively.
- While the broader crypto market has fallen, apecoin (APE) bucked the bearish trend, rising more than 17% as traders took advantage of a negative long/short ratio, liquidating a $1 million short position in the process.
- CoinMarketCap’s “Altcoin Season” indicator remains in a neutral zone at 39/100, suggesting investors are focused on bitcoin and whether it can break above $80,000 or continue its slide into the mid-$70,000 region.
