The crypto market showed few, if any, signs of recovery on Tuesday with bitcoin trading at $91,400 while ether traded around $3,060.
The fear and greed index is now flashing 15/100, a low not seen since April, before the bitcoin price defied bearish expectations by surging to over $100,000 from $76,000 in a month.
While there is reason to expect a bounce as sentiment rests on cycle lows, bitcoin may test the $87,500 support level to remove any vestiges of leverage before shifting higher.
As Wall Street veteran Warren Buffet once said, “Buy when there’s blood in the streets, even if it’s your own.”
That statement may ring true for a number of traders who are prepared to take risks at these levels, though others continue to trade emotionally and lose millions in the process, as evidenced by Monday’s cautionary tale of a trader who lost $5.5 million after shorting the bottom with 30x leverage.
Derivatives positioning
- Over $1 billion worth of leveraged crypto futures bets have been liquidated in the past 24 hours, with longs accounting for most of the figure. The data shows that bulls continue to be displaced.
- Volmex’s BVIV, which measures the 30-day implied volatility of the BTC price, briefly rose to 55% y-o-y in Asian hours, the highest since the Oct. 10 crash.
- BTC global futures open interest (OI) continues to rise, reaching a six-week high of 730,550 BTC. A rise in open interest alongside a fall in the spot price is said to confirm a downward trend.
- ETH futures OI remains around 12.5 million ether.
- Perpetual funding rates for most tokens, excluding TRX, remain mildly positive despite large liquidations.
- On Deribit, a bias for puts has strengthened in BTC and ETH options. Block streams featured the BTC $90,000 strike set expiring on November 28 and the rollover of positions in ETH $4,000 call options.
Token talk
- The private coin sector saw a strong selloff with zcash and line decreased by 14% and 9% respectively.
- The slide outpaced the decline seen across other altcoins, including ether and which has fallen by about 4% over the past 24 hours.
- ASTER and HYPE, both tokens linked to decentralized derivatives exchanges, bucked the bearish market trend, rising 8.5% and 5%.
- The broader market remains deflated: The CoinDesk 10 index, excluding bitcoin, lost 3.8% of its value over the past 24 hours, compounding a monthly loss of 19.7%.
- Traders will exercise caution following the crypto market’s recent plunge, this could see a focus on bitcoin, historically less volatile than altcoins, as they try to find a safe haven.
- A series of lower highs and lower lows across several altcoin trading pairs demonstrates a class set of downtrends, although it is worth noting that past bull markets often contain a number of 30% corrections, so the market is not quite in crypto winter territory yet.
