The crypto market fell on Thursday with bitcoin lost about 0.7% since midnight UTC after Wednesday’s rally to a three-month high of $82,800.
Ether lost about 1% during Asian and European hours, and is now trading at $2,325 after briefly topping $2,420 on Wednesday.
The broader market is showing early signs of a bullish turn after a two-month consolidation pattern between February and April, although it’s worth noting that bitcoin needs to break $98,000 to break its current cycle of lower highs and lower lows.
The altcoin market continues to indicate investor rotation, with the likes of ALGO and TON up between 8% and 9% since midnight UTC.
U.S. stock futures were flat on Thursday, while the dollar index ( DXY ) fell about 0.1% as investors remained hopeful of a deal that could end the war in Iran.
Derivatives positioning
- Crypto futures market activity remained relatively muted over the past 24 hours, with total futures volume rising just 3% to $216 billion, while total open interest (OI) fell 3% to $133 billion. The difference between suggests that positioning is reducing rather than expanding, indicating deleveraging across the market.
- BTC’s open interest fell to 762K BTC from 793K BTC a day earlier, ending a three-day streak of sustained position growth. Among major assets, DOGE recorded the sharpest drop in OI, down 6%, while XRP OI fell around 1%. The decline across these assets suggests capital outflows and reduced speculative appetite in the near term.
- DOGE positioning seems particularly weak. Funding rates remain negative at an annualized rate of around 6%, indicating that short positions are paying longs to maintain exposure. At the same time, DOGE’s 24-hour cumulative volume delta (CVD) is the most negative among major tokens, signaling aggressive selling pressure from market participants using market orders.
- BTC funding rates, meanwhile, remain broadly neutral after averaging around minus 4% y/y in recent weeks. The normalization in funding suggests that excessive bearish positioning has largely been flushed out of the market. Some observers see this reset as constructive for BTC price action.
- In contrast, ETH and SOL both recorded OI increases of 1% or more despite weakened spot prices. Rising open interest along with falling prices typically indicates fresh short positioning entering the market, indicating that traders may be positioning for further downside in these tokens.
- TON continues to stand out on the positioning front. Open interest rose more than 10% to another record high, signaling continued capital inflows into the asset. TON’s price briefly touched $2.90 earlier today, the highest level since September, and the token is now up 93% on the week. The simultaneous rise in both price and OI points to strong directional participation.
- TON, TRX and ZEC are currently the only top-30 tokens posting OI-adjusted positive cumulative volume delta readings. This suggests that buyers are driving trading activity through aggressive market orders rather than passive limit bids. Most other major assets including BTC, ETH and XRP continue to show negative CVD readings.
- In the options market, bullish sentiment remains on Deribit, with call options at strike levels above $80,000 continuing to dominate the 24-hour volume rankings. According to Glassnode, traders with short gamma exposure can buy into a potential BTC move above $82,000 to maintain hedges. It can increase the momentum further.
- Meanwhile, the one-month volatility risk premium, which measures the gap between implied volatility (IV) and realized volatility (RV), has turned positive again, according to Glassnode. This shift indicates renewed demand for short-term optionality and suggests that traders are increasingly willing to pay for short-term volatility exposure after an extended period of compressed expectations.
Token talk
- CoinDesk’s DeFi Select Index (DFX) and CoinDesk MemeCoin Select Index (CDMEME) are the best-performing benchmarks on Thursday, rising 2.5% apiece as speculative trading begins to take effect.
- The Bitcoin-weighted CoinDesk 5 (CD5) and CoinDesk 20 (CD20) indexes are flat since midnight UTC, while the broader CoinDesk 100 (CD100) was also marginally in the red.
- CoinMarketCap’s “altcoin season” indicator is now at 45/100, the highest level since late March, up from 32/100 since this time last month.
- Despite the broader altcoin market being upbeat, popular DeFi token MORPHO lost 4.6% of its value since midnight UTC and 6.1% over the past 24 hours. it is currently trading at $2.13, with investors taking profits after a rally earlier this week that lifted it from $1.95 to $2.33.
