Bitcoin recovered 0.7% on Wednesday but remains at a crucial crossroads after falling 9.5% since Sunday.
The major cryptocurrency recently traded near $67,000, stuck in the middle of a range that lasted between February and April after a failed breakout attempt above $81,000 last month.
If bitcoin falls below $60,000, it will likely trigger a wave of liquidations and a possible drop to as low as $54,000, a support level that dates back to both 2024 and 2021.
Ether (ETH), meanwhile, is trading at $1,870 after rising 0.9% since midnight UTC, although the rejection comes after a sell-off that sent it down to its lowest point since February.
The US stock market rose to record highs again on Tuesday. The divergence is starting to trigger concerns among some crypto investors because the two asset classes have historically moved together.
AI crypto tokens continued to outperform peers. NEAR, RENDER and FET were all up about 9% on Wednesday after Tuesday’s market-wide selloff.
Derivatives positioning
- Over $1.7 billion in leveraged crypto futures bets were liquidated in the last 24 hours, double the previous day.
- Most liquidations were bullish long positions after BTC fell to $65,500 earlier today. 24-hour volume rose 27% to nearly $300 million, while cumulative industry-wide nominal open interest (OI) fell just over 2%.
- The combination of large liquidations and declining open interest suggests aggressive displacement of leveraged bullish plays and a reduction in new leveraged exposure.
- Open interest in bitcoin futures hovers at record highs above 800K BTC, up for third day in a row, even as spot prices fall. It validates the downtrend and points to an influx of new shorts or bearish positioning.
- The seven-day OI-adjusted cumulative volume delta is negative, indicating that bears are leading price action by actively shorting market orders rather than using passive limit orders.
- Most major tokens, including ETH, ADA, SUI, XRP and SOL, are also showing negative seven-day and 24-hour cumulative volume deltas, signaling bearish leadership across markets. Funding rates for these tokens remain slightly positive to slightly negative, meaning the bearish side is not crowded and there is room for further downside.
- However, open interest in ZEC futures rose for the third day in a row to 2.43 million ZEC as the token rose 6.3% over seven days, bucking the broader malaise. ZEC is also showing a positive 24-hour CVD along with HYPE, indicating bullish sentiment.
- Fear is creeping in again. The BTC and ETH 30-day implied volatility indices (BVIV and EVIV) jumped sharply on Tuesday, posting their biggest one-day gains since the February 5 crash. Continued increases in the measure could herald further market pain.
- Options flow on Deribit shows traders paying up for downside protection. One-week put-call bias rose to nearly 20% early today, reflecting excessive demand for puts. The most traded instruments in the past 24 hours were the $70,000 put that expires on June 5th and the $55,000 put that expires on June 26th.
- In block streams, BTC call spreads and ETH put spreads were the most preferred bets.
Token talk
- Athena (ENA) is one of Wednesday’s top altcoins, up 9.3% since midnight UTC and more than 20% in 24 hours after Coinbase (COIN) said it will integrate Athena features into a new savings account product.
- There was a notable gain for the privacy coin zcash (ZEC). The token is up 2% since midnight and 12% in the last 24 hours as it tries to steer itself away from danger.
- CoinMarketCap’s “Altcoin Season” indicator is now at 53/100, the highest since early March, as investor appetite for high-risk altcoins remains despite weakness among major crypto markets.
- Humanity Protocol (H) appears to be entering a corrective phase after it lost a quarter of its value in 24 hours following a 200% rally in the past week, with profit taking evident. Daily trading volume fell 55% to $314 million.
