Bitcoin gave back much of its recent gains on Thursday, and is now trading at $66,700 after losing 2.4% of its value since midnight UTC.
Ether (ETH) fared even worse, falling 4.4% as the broader crypto market struggles to deal with the ongoing risk-off vote.
The latest plunge was spurred by US President Donald Trump, who said on Wednesday night that the war in Iran would continue with large-scale attacks on Iran.
“Over the next two to three weeks, we will bring them back to the stone age where they belong,” he said.
The comments led to an immediate spike in oil prices, with Brent crude up about 10% to $108 a barrel. barrel as US stocks diverged.
Nasdaq 100 and S&P 500 futures lost 1.5% and 1.1%, respectively, while the US dollar rose 0.5% to over 100 points.
Derivatives positioning
- BTC’s price is down over 2% since midnight UTC hours along with a slight increase in open interest in major USD and USDT denominated futures. In addition, perpetual funding rates have fallen to their most negative since March 12. This combination suggests that traders are bearish and short the declining market.
- In ether’s case, funding rates are the most negative since last October, a sign of strong bias for bearish bets. Meanwhile, bearishness in solana (SOL) is surprisingly more measured despite the overnight hack.
- Privacy focused zcash (ZEC) and has seen a notable drop in 24-hour open interest (OI), a sign of capital outflows.
- Nearly $400 million in futures positions have been liquidated due to margin shortages. That’s a 17% increase in losses compared to the previous day.
- Despite renewed risk-off tone, bitcoin and ether’s 30-day implied volatility index remains flat in recent ranges. It points to orderly sales on the spot market rather than panic.
- There is little opportunity for panic because traders are already positioned to swoon in the market. They have been consistently chasing bitcoin and ether put options (downside hedges) since the start of the year. At the time of writing, bitcoin and ether puts remained more expensive than calls across all tenors on Deribit.
- Block streams included demand for ether straddles, a volatility strategy, and put spreads and bitcoin call spreads.
Token talk
- The worst-performing benchmark on Thursday was CoinDesk’s DeFi Select Index (DFX), which lost 5.9% since midnight UTC, closely followed by the CoinDesk Computing Select Index (CPUS), which fell 5%.
- Athena (ENA) led the downside as it fell by more than 10% on Thursday, there was also a sharp decline among DeFi tokens UNI, LDO, SKY and AAVE – all down between 4.2% and 6.5% in Asian and European hours on Thursday.
- Algorand ( ALGO ) bucked the bearish market trend, rising about 0.8% on Thursday as it continues its rich run after surging 22% in the past week.
- CoinMarketCap’s “altcoin season” index has fallen from 50/100 to 42/100 since March 30, highlighting relative weakness across the sector.
