The crypto market is in a buoyant mood on Monday after bitcoin rose to $93,350, its highest level since Dec. 11, before giving back some of those gains.
The bulk of the move happened at midnight UTC, around the time bitcoin futures trading opened on the CME exchange, creating a “gap” between $90,500 and $91,550.
These gaps are typically filled in a few days, meaning the price is likely to return to the $90,500 level at some point this week.
Traders are focusing mainly on bitcoin as opposed to altcoins, with the industry’s biggest asset up 1.33% since midnight, while the CoinDesk Meme (CDMEME) and Metaverse (MTVS) indexes lost 6.4% and 2.3%, respectively, over the same period.
Stocks and precious metals also rose overnight to suggest a risk-on approach following the latest US action in Venezuela.
Derivatives positioning
- Exchanges have liquidated $260 million worth of leveraged crypto futures bets in the past 24 hours, with shorts accounting for most of the action. In other words, leverage was skewed bearish and caught off guard by the price increase.
- Open Interest (OI) in BTC, its expiration as well as XRP and BNB are up between 2% to 5% in 24 hours, while ETH, SOL, DOGE and ZEC have seen flat to negative OI. These divergent trends indicate that investors’ risk appetite has only improved for a select few coins.
- Apart from BCH, BTC, BNB, XLM, the OI-adjusted cumulative volume delta of other top 20 coins has been negative in the last 24 hours, indicating net selling pressure in the market.
- BTC’s annual perpetual funding rates have topped 10% as a sign of increasing demand for bullish exposure. Prices for several altcoins continue to remain below zero.
- On Deribit, the bias for BTC positions has weakened across the board, with traders chasing calls on the $100,000 strike.
- Blockstreams highlighted put spreads in BTC and call spreads in ETH.
Token talk
- Despite traders focusing on bitcoin, a number of tokens outperformed the broader market on Monday.
- This included newly issued LIT, the native symbol of perpetual exchange Lighter, which is up 3.9% since midnight, while AI-focused FET continued a weekend rally with a gain of 7.4% since midnight.
- However, warning signs persist, with the average crypto relative strength index (RSI) flashing 58/100 as it enters “overbought” territory. This suggests that a short-term decline is in play as those with profits are likely to lock in their gains.
- Some tokens failed to capitalize on the overnight surge: Zcash is down 2.5% since midnight, while memecoins doge (DOGE) and pepe (PEPE) lost 1.4% and 4.5%, respectively.
- The broken performance across the altcoin market shows two things; indecision from traders and a persistent lack of liquidity that has blighted the crypto market since October’s liquidation event.
