The crypto market is teetering on the brink of a major price crash after suffering one of its worst weeks since July 2024.
Bitcoin currently trading around $62,500, has lost more 14.5% since midnight UTC Monday morning, while ether (ETH) is down more than 17% and fell 5.5% on Friday alone.
Ether, the second-largest cryptocurrency, is now at its lowest level since April 2025, when it peaked at $1,420 before rising to record highs over the subsequent four months. A break below this level would take it towards 2022 bear market levels where it dipped below $900.
The broader altcoin market also suffered heavy losses this week. One of the worst performers on Friday was zcash (ZEC), which fell more than 30% after a security researcher found an exploit that would have minted “unlimited” tokens in its ringfenced pool.
There are several catalysts causing this week’s decline. Strategy (MSTR) executive chairman Michael Saylor attributed it to capital rotation in light of a number of AI IPOs in the US, while onchain analysts point to a lack of spot crypto volume.
CryptoQuant notes that spot trading volume fell to $679 billion in April, the lowest monthly level since October 2023, indicating a lack of demand.
Derivatives positioning
- BTC derivatives positioning has turned from mild improvement to clear deleveraging this week. Open interest fell 15% to $17 billion and funding rates fell flat to negative across multiple venues
- At Deribit, the rate fell to -15% year-on-year, a remarkable turnaround from the previous positive regime. The three-month annual basis fell to 2.7% from 2.9% last week, confirming a setback in institutional risk appetite.
- Options positioning has turned distinctly defensive: Put/call volume has turned to a 50/50 split over the past 24 hours, shedding the previous call tilt, while the one-week 25-delta bias more than doubled to 27% from 13% a week ago. It signals a sharp escalation in demand for downside protection.
- Front-end implied volatility (DVOL) has risen further to 47, confirming a sustained bid consistent with the broader deleveraging in derivatives.
- Coinglass data shows $1.2 billion in 24-hour liquidations, with a 76-24 split between longs and shorts. Bitcoin ($364 million), ether ($291 million) and zcash ($107 million) led the way in fictitious liquidations.
- The Binance liquidation heatmap indicates $60,900 as a basic BTC liquidation level to monitor in case of a price drop.
Token talk
- Zcash’s (ZEC) situation on Friday sowed seeds of doubt across privacy coins, with monero (XMR) losing 12% since midnight UTC and dash (DASH) down 9%.
- ZEC’s losses were compounded by BitMEX founder Arthur Hayes, who said on X that his company had sold its entire allocation of the token.
- There were also great losses for which fell more than 10% after the project’s founder, Charles Hoskinson, said he was “taking a break” after warning of ecosystem failures.
- AI tokens lost their momentum in the early week as FET, NEAR and TAO fell 4%-6% despite outperforming the rest of the market on Monday.
- One reason altcoin holders are hopeful is the fact that the average relative strength index (RSI) across all crypto pairs is in “oversold” territory, suggesting a relief bounce could be on the cards this weekend.
