Bitcoin and the broader crypto market succumbed to a wave of selling pressure during the Asia session, leading to a drop to around $91,530 at 10:00 UTC from around a local high of $93,750 at midnight.
The sell-off follows a failed attempt to break above $94,500 on Tuesday, the third in the past five weeks.
The altcoin market fared worse than bitcoin, with PENGU and XRP taking the brunt of the hit, down 6.5% and 3.5% since midnight.
Bitcoin is now trading firmly back in December’s range, which saw various gains between $85,000 and $94,500, although it extended the decline that started in October.
Wednesday’s decline reflects an increase in risk-off sentiment from traders. US stocks were also down in pre-market trade, with Nadsaq 100 futures trading 0.32% lower since midnight.
Derivatives positioning
- Exchanges have liquidated $465 million worth of crypto futures bets over the past 24 hours, with longs accounting for over 50% of the figure. This is in stark contrast to the pasta two days where shorts faced the bulk of liquidations.
- Still, cumulative open interest (OI) in crypto futures listed worldwide remains consistently above $143 billion, the highest in nearly two months, with moderately positive funding rates indicating a bullish positioning.
- OI in XRP, DOGE, SUI and ZEC fell 5%-6%. This is probably related to profit taking after recent price increases of these tokens.
- CME’s BTC futures are showing signs of green shoots, with OI rising from 100K BTC to 111K BTC since December 30th. Even so, the overall positioning is still light compared to a year ago when OI stood at over 191K BTC.
- On Deribit, the skews for BTC and ETH continue to weaken, although bullishness has yet to emerge.
- BTC block flows show a mixed profile, with chokes suggesting a bullish volatility bias and call spreads indicating upside price expectations. In ETH’s case, straddle, also a volatility strategy, was the most preferred play.
Token talk
- Memecoins and privacy coins were Wednesday’s two worst performing sectors with zcash privacy leader, down 4.5% since midnight UTC.
- CoinDesk’s Memecoin Index (CDMEME) fell 1.5%, about twice as much as the CoinDesk 5 Index, which measures the price of BTC, ETH, XRP, SOL and ADA.
- A glimmer of hope for the altcoin market is the decentralized finance (DeFi) sector, where total value locked (TVL) across the entire ecosystem is up 0.17% over the past 24 hours despite assets moving to the downside, indicating positive inflows, according to DefiLlama.
- CoinMarketCap’s “altcoin season” indicator is at 25/100, down slightly from last week’s high of 27 but significantly above December’s low of 14, suggesting signs of optimism in the altcoin market.
- A deviator from the move to downward var which remains in the black since midnight to add to a 1.2% gain over the past 24 hours.
