By Omkar Godbole (All times ET unless otherwise noted)
Sentiment in the crypto market is still undecided after bitcoins quickly reversing the early Tuesday rise to $114,000, and most altcoins mimicked the pop and drop. The CoinDesk 20 index is little changed over 24 hours, although gold’s rally stalled, raising hopes of rotation into digital assets.
The two-way price action liquidated $600 million worth of crypto futures bets. According to CryptoQuant, this represents a three-sigma liquidation event: Liquidation volume was three standard deviations away from the mean, marking it as an extreme outlier and an indicator of increased volatility.
Meanwhile, the ratio of open interest (OI) in bitcoin options to futures OI rose to the highest level since late 2023. This is typically a sign that increased price fluctuations are on the way. In addition, bitcoin’s 30-day implied volatility indices, BVIV and DVOL, remain elevated (check the Technical Analysis section), maintaining the gains seen after the October 10 crash and underscoring the lingering uncertainty.
“Such fluctuations do not contribute to improving sentiment among crypto investors,” Alex Kuptsikevich, FxPro’s chief market analyst, said in an email.
The continued nervousness reflected in the Crypto Fear & Greed Index’s drop to 25 could be a good entry point. “At current levels, the ‘buy when everyone is scared’ rule could work, or there could be a switch to a more intense sell-off after three months of stagnation,” he said.
In other news, Japan’s newly elected Prime Minister Sanae Takaichi is said to be preparing an economic stimulus package that exceeds last year’s $92 billion to help households tackle inflation. The move is seen as an addition to BTC’s upward trajectory by observers including Arthur Hayes, CIO of Maelstrom Fund.
In industry news, the WSJ said crypto trading firm FalconX is buying ETF manager 21Shares, and the combined firm will develop funds focused on derivatives and structured products. A Bloomberg report noted that some of Asia’s biggest exchanges have become resistant to taxing companies with digital assets.
As for traditional markets, the dollar index held on to weekly gains and gold fell for a second day, nearly testing $4,000 per ounce. ounce price tag. Pay attention!
What to see
For a more comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead.”
- Crypto
- 22 Oct at 11: Circle is hosting a virtual seminar on Zoom called “Inside the Circle Payments Network (CPN)” to explain how financial institutions can leverage CPN for fast, compliant stablecoin settlements.
- October 22: White House AI and Crypto Czar David Sacks meets with members of the Republican Senate Banking Committee to discuss advancing crypto market structure legislation.
- October 22: Two industry roundtables on crypto regulation in the US Senate, one held by Democratic Senator Kirsten Gillibrand and one held by Republican Senator Tim Scott.
- October 22: Zilliqa (ZIL) will activate its mainnet upgrade, Zilliqa 2.0, with a hard fork at block 11,998,800.
- Macro
- 22 October at 8: Mexico August Economic activity. YoY Est. -1%, MoM Est. 0.1%.
- Earnings (Estimated based on FactSet data)
- October 22: Tesla (TSLA), after market.
Token Events
For a more comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead.”
- Governance votes and calls
- Unlocks
- October 22: Roll ( SCR ) to unlock 43.42% of its circulating supply, worth $13.56 million.
- October 22: MultiBank Group (MBG) unlocks 11.97% of its circulating supply, worth $16.31 million.
- The token is launched
- October 22: Turtle (TURTLE) to list on Binance.
- October 22: must be listed on Coinbase.
Conferences
For a more comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead.”
Token Talk
By Oliver Knight
- continued its rise on Wednesday, leading the otherwise weak altcoin market with a 9.2% move to the upside over 24 hours.
- The privacy token is now up a staggering 461% in the past month and continues to hit record highs.
- The catalyst behind ZEC’s rise is increased sentiment around the growth of hedged tokens, which currently account for 27.5% of the total supply.
- Shielding is a privacy mechanism that masks transactions. Protected tokens must be held in a non-depot wallet, in other words not an exchange.
- With so much supply in private wallets, the premise is that the marketable supply is limited.
- Combine a reduction in supply with increasing demand, and this is the result: a relentless rally to the upside that has outpaced nearly every crypto token in circulation.
- ZEC’s rise has been a rare sign of optimism over the past few weeks as several other tokens have fallen to multi-month lows.
- ASTER, often dubbed the plat du jour in September, dipped below $1.00 on Tuesday to compound a 33% decline over the past week.
- Newly issued plasma Tokens have also found themselves on the sell side of the order books, with demand and hype quickly disappearing, resulting in a 25% move in the past seven days.
Derivative positioning
- futures open interest (OI) has risen 22% to $303 million in the last 24 hours, leading to growth in a select few major coins such as ENA, BCH, HYPE, ADA, AVAX and BTC.
- Futures linked to LINK, XPL and PUMP saw capital outflows, reflecting heightened investor risk aversion amid volatile market swings.
- Annualized perpetual funding rates for most major cryptocurrencies, including BTC and ETH, remain close to zero, indicating a balanced derivatives market.
- BTC’s order book heatmap showed a cluster of sell orders around $111K in the Binance-listed BTC/USDT perp.
- On CME, OI in ether futures hit a record high of 2.43 million ETH, with OI in options holding steady near the lifetime high of 297K ETH. However, BTC continued to lag in terms of futures OI, which held at around 142K, significantly lower than the peak of over 200K late last year. The divergence points to institutional investors’ preference for ETH over BTC.
- On Deribit, flows featured short choke and call override strategies in BTC, with some demand for puts as protection against deeper slides. In ETH’s case, the focus was near-dated put spreads and calendar spreads, according to Wintermute.
- In BTC’s case, traders set the trade at a premium for calls across all tenors. However, TH options showed bullishness after the December expiration.
Market movements
- BTC is down 2.59% as of 16 ET Tuesday at $108,002.87 (24 hours: -0.51%)
- ETH is down 3% to $3,838.34 (24h: -0.98%)
- CoinDesk 20 is down 3.3% to 3,549.42 (24h: -0.78%)
- Ether CESR Composite Staking Rate is down 1bp to 2.83%
- BTC funding rate is at 0.0036% (3.9946% annualized) on Binance
- DXY is unchanged at 99.01
- Gold futures are down 0.7% at $4,080.50
- Silver futures are unchanged at $47.69
- The Nikkei 225 closed unchanged at 49,307.79
- The Hang Seng closed up 0.94% at 25,781.77
- The FTSE rose 0.75% to 9,497.77
- The Euro Stoxx 50 is down 0.35% to 5,667.02
- The DJIA closed Tuesday up 0.47% at 46,924.74
- The S&P 500 closed unchanged at 6,735.35
- The Nasdaq Composite closed up 0.16% at 22,953.67
- The S&P/TSX Composite closed up 1.73% at 29,888.82
- The S&P 40 Latin America closed up 1.24% at 2,880.55
- US 10-year Treasury yield unchanged at 3.955%
- E-mini S&P 500 futures are unchanged at 6,775.50
- E-mini Nasdaq-100 futures are down 0.15% at 25,257.50
- The E-mini Dow Jones Industrial Average Index is unchanged at 47,133.00
Bitcoin statistics
- BTC dominance: 59.75% (unchanged)
- Ether to bitcoin ratio: 0.03568 (-0.21%)
- Hashrate (seven-day moving average): 1,107 EH/s
- Hash price (spot): $46.57
- Total Fees: 2.95 BTC / $324,895
- CME Futures open interest: 142,385 BTC
- BTC Priced in Gold: 25.7 oz.
- BTC vs Gold Market Cap: 7.26%
Technical Analysis
- BTC’s 30-day implied volatility indices, DVOL and BVIV, have risen above their respective 200-day simple moving averages for the first time since April.
- These breakouts indicate expectations of increased price turbulence over the next four weeks.
Crypto stocks
- Coinbase Global (COIN): closed Tuesday at $338.62 (-1.5%), -2.02% to $331.78 in premarket
- Circle Internet (CRCL): closed at $129.85 (-0.73%), -1.34% at $128.11
- Galaxy Digital (GLXY): closed at $42.86 (+8.1%), -5.27% at $40.60
- Bullish (BLSH): closed at $57.27 (-2.54%), -2.97% at $55.57
- MARA Holdings (MARA): closed at $20.07 (-3.18%), -2.64% at $19.54
- Riot Platforms (RIOT): closed at $20.67 (-6.09%), -2.9% at $20.07
- Core Scientific (CORZ): closed at $19.23 (+2.23%), -2.18% at $18.81
- CleanSpark (CLSK): closed at $18.77 (-7.99%), -3.89% at $18.04
- CoinShares Valkyrie Bitcoin Miners ETF (WGMI): closed at $56.01 (-6.29%), -4.77% at $53.34
- Exodus Movement (EXOD): closed at $24.68 (-5.55%)
Crypto Treasury Companiesat
- Strategy (MSTR): closed at $301.91 (+1.79%), -2.29% at $295.00
- Semler Scientific (SMLR): closed at $23.51 (-0.59%)
- SharpLink Gaming (SBET): closed at $14.34 (-3.04%), -2.51% at $13.98
- Upexi (UPXI): closed at $5.09 (-11.01%), -3.54% at $4.91
- Lite Strategy (LITS): closed at $1.95 (-1.52%)
ETF Flows
Spot BTC ETFs
- Daily net flows: $477.2 million
- Cumulative net flows: $61.94 billion
- Total BTC holdings ~1.35m
Spot ETH ETFs
- Daily net flows: $141.7 million
- Cumulative net flows: $14.61 billion
- Total ETH holding ~6.74 million
Source: Farside Investors
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