The crypto market fell on Wednesday with bitcoin down about 0.9% since midnight UTC to $65,900 and ether (ETH) down 0.5% to $1,920.
The pullback came after the biggest cryptocurrency rose to its highest point in more than a month on Tuesday, with some degree of profit-taking always a likely outcome.
A major macroeconomic influence was the increase in the WTI crude oil price. The US oil benchmark topped $85 a barrel. barrel for the first time since June 12 as the Iran conflict escalated, reviving the inflation worries that have weighed on risk assets for most of the year.
Nasdaq 100 and S&P 500 index futures both fell, while gold rose 0.95% to $4,118 and silver rose 1.2% as investors flocked to assets.
The demand for security was also visible in crypto assets, with bitcoin’s dominance rising to 59% as capital retreated from altcoins and stablecoins to the relative safety of the largest token.
Derivatives positioning
- Market activity slows down: Trading volume over the past 24 hours fell 12% to $150 billion, while open interest (OI) remained static around $116 billion. With only $165 million in liquidations, the market appears to be taking a breather.
- Long/short ratio tightens: The 24-hour long/short ratio stands at 50.59/49.41, a tighter and more indecisive reading than a day ago. While technically every long position is matched by a short in terms of total contracts, this ratio specifically tracks the number of accounts that are net-long versus net-short. The tightening suggests that the bullish bias seen yesterday is evaporating.
- Short interest builds in HYPE: Hyperliquid’s HYPE token is down over 6% in 24 hours, one of the biggest losers among major tokens. The drop comes alongside a significant rebound in futures open interest to 42.8 million HYPE, the highest level since June 4. With annualized perpetual funding rates slightly negative and 24-hour cumulative volume delta (CVD) in the red, the data suggests a clear bias for short positioning. Traders appear to be aggressively positioned for or anticipating a deeper price drop in the token.
- Bearish momentum continues in XLM: Open interest in XLM futures rose for the third consecutive day to a total of 1 billion tokens. XLM is also reporting a negative 24-hour CVD, a sign that bears are leading the price action by shorting through market orders instead of limit orders. Therefore, it is no surprise that the token’s price has failed to sustain gains above 19 cents for the second day in a row.
- Constant open interest in top-tier assets: OI in BTC and ETH has remained stable over the past 24 hours. This lack of movement signals that there has been very little position adjustment or conviction to change exposure despite spot prices retreating from the highs reached on Tuesday.
- Broad-based bear management: Most major cryptocurrencies, except XMR, XAUT and HBAR, exhibit negative 24-hour CVDs. This confirms that the current market environment is characterized by broad-based bearish leadership, with sellers more active than buyers at current levels.
- Rising volatility expectations: Bitcoin’s 30-day implied volatility index (BVIV) has risen to 40% from 37.5%, a sign that traders are starting to pay a higher premium for protection as they expect more turbulent price action ahead. The Ether Volatility Index (EVIV) is also showing signs of increased buoyancy.
- Demand for upside exposure in options: BTC calls continue to dominate the 24-hour volume rankings on Deribit, with activity heavily concentrated in the $70,000 and $72,000 contracts. Calls give traders bullish exposure to the underlying asset, suggesting some are looking past the current decline. Ether options are also seeing a preference for calls, with the $3,000 strike emerging as the most traded contract over the past 24 hours.
Token talk
- Dash (DASH) led losses on Wednesday, falling 4.1% since midnight UTC to $33.44, with hyperliquid (HYPE) not far behind, losing 3.42% to $58.79, as the decentralized exchange token continues to bounce back from last month’s highs.
- Midnat (NAT) was the standout winner in the last 24 hours, rising 19% after a sell-off on Monday. Charles Hoskinson, founder of the Cardano blockchain platform, described the project at X as an “incredible ecosystem with “wonderful technology.”
- Ether.fi (ETHFI) and ethena (ENA) bucked the broader weakness, rising 2.63% and 1.27% respectively, to extend a streak of outperformance by DeFi tokens.
- Ondo is among the week’s more compelling moves, up 26% over seven days to $0.40, as real-world tokenized assets continue to attract speculative interest despite the muted macro environment.
- CoinMarketCap’s Altcoin Seasonal Indicator read 50/100, down slightly from last week’s high as investors refocused on bitcoin.
