The crypto market fell overnight with bitcoin down 1.5% from the high it hit in the early hours on Wednesday.
The wider market followed suit. The CoinDesk 20 (CD20) was down 1.6% since midnight UTC with all members of the index down.
Bitcoin’s selloff after failing to break above $94,700 last week has extended a downtrend that started in early October with a series of lower highs.
To break the bearish trend and stage a rally, the largest cryptocurrency needs to trade back above $95,000 and ideally $98,000, even if year-end catalysts remain absent.
However, much of the market is in “oversold” territory according to the average crypto relative strength index (RSI), which stands at 38.49/100, indicating the potential for a short-term relief rally.
Derivatives positioning
- BTC’s 30-day implied volatility, represented by Volmex’s BVIV, remains below 50% year-on-year, suggesting calm in the market ahead of Thursday’s US inflation data and Friday’s Bank of Japan rate decision.
- BTC’s 90-day historical volatility is now in line with major tech stocks like Tesla and Nvidia, a sign of market maturation.
- BTC/USD longs on Bitfinex hit highest since February.
- Open interest (OI) in futures linked to most tokens, including BTC and ether has fallen over 24 hours. BCH, UNI and NEAR stand out with moderate increases in OI.
- On Deribit, put write at bitcoin’s $85,000 strike and call write at $95,000 and $100,000 strikes point to expectations for a wide range of near-term plays.
- Blockstreams featured straddles and risk reversals in BTC and call calendar spreads in ether.
- Broadly speaking, both BTC and ETH puts remain more expensive than calls, pointing to persistent concerns about downside and call overwriting.
Token talk
- The altcoin market continues to show weakness against bitcoin trading pairs, with bitcoin dominance rising to 58.7% from 57.8% on November 26.
- ASTER and TAO are the two worst performing altcoins out of the top 100, posting a 6.5% and 6.1% move to the downside since midnight UTC.
- The drop in ASTER extends a bearish trend since the weekly candle opened on Monday, down over 20% as hype surrounding BNB Chain derivatives exchanges continues to fade.
- There were a handful of bullish outliers in the altcoin market, these included monero up 0.2% since midnight and Cardano’s privacy token, NIGHT, which was up more than 5% by mid-morning in Europe.
- The “Altcoin Season” indicator is at 19/100 as the market remains firmly focused on bitcoin since October’s liquidation wipeout.
