The crypto market remains under pressure ahead of key US inflation data, which is expected to show the cost of living rose to a three-year high of over 4% in May.
Tokens such as privacy-focused zcash (ZEC) and decentralized exchange Hyperliquids HYPE have each fallen over 10% in 24 hours, a signal of risk aversion in the broader market. ADA, ONDO, BCH are other losers falling more than 4%. The CoinDesk 20 index fell 3% in the period.
Bitcoin has fallen back below $61,500, nearly reversing Sunday’s rejection, which saw prices rise above $64,000 on some exchanges. More importantly, the cryptocurrency is trading below its 200-week simple moving average (SMA), a technical line that is closely watched by traders.
“The history of the 200-week moving average over the past 11 years (prior to this the market had not dipped below it) shows that the average time spent near it is almost 11 months, suggesting a very long bear market,” Alex Kuptsikevich, chief market analyst at FxPro, said in an email.
Derivatives positioning
- Crypto futures volume over the past 24 hours rose 1.2% to $193 billion, while open interest fell 1.5% to $102.27 billion. Liquidations, on the other hand, rose 38% to $418 million, with longs accounting for more than $300 million of the total as bitcoin slipped back toward $61,000 yesterday.
- Bitcoin futures open interest (OI) moved up to 728,000 BTC from 712,000 BTC, even as the cryptocurrency’s price fell. Rising OI to a price decline indicates new short positioning, a sign that traders are positioning for a further decline.
- This conclusion is reinforced by negative perpetual funding rates and a negative OI-adjusted 24-hour cumulative volume delta, the latter indicating that sellers are bidding the market rather than placing passive limit orders.
- Solana futures OI rose to 69.58 million tokens, up nearly 2% on the day, closing in on the June 5 record high of 71.57 million. Funding rates and CVD are negative, reflecting bitcoin’s bearish setup.
- The bearish tilt extends across the board. Funding rates and CVD are negative for most major coins, including ether (ETH) and XRP. The only exception is XMR, whose 24-hour CVD is narrowly positive.
- Bitcoin’s 30-day implied volatility index is 51.21%, up from 45.8% on Monday, reflecting renewed uncertainty ahead of the US CPI release later today. ETH’s implied volatility index has also ticked higher.
- On Deribit, short puts on both BTC and ETH continue to command a notable premium to calls, a sign that demand for downside hedging remains high. One-week implied volatility trades cheaply relative to one-week realized volatility, a setup that favors option buyers.
- In block flows, a long butterfly was structured in the July 31 expiration involving long positions in calls at the $70,000 and $80,000 strike prices and short 2x in the $75,000 call. The trade profits if BTC consolidates around $75,000 by the end of July, meaning the desk behind the position sees limited directional conviction from here.
Token talk
- Uniswap V4’s Total Value Locked (TVL), the deposits sitting within a protocol, appeared to explode more than 350% in one day, with DefiLlama showing around $2 billion of apparent inflows concentrated on the BNB Chain. The jump was big enough to look like a major liquidity migration to the stock market.
- However, that was not the case. The number was not a wave of capital flowing into the protocol. CoinDesk traced the spike to Humanity Protocol’s H token, which was hacked and minted in unlimited supply a day earlier. The worthless new tokens sat in a BNB Chain pool, inflating the dashboard’s dollar reading rather than representing real deposits. DefiLlama’s founder was contacted for confirmation.
- Santiment, a behavioral analytics platform, said the broader market sell-off has reached a historic buy zone.
- 30-day market capitalization to realized value (MVRV), a measure of the average profit or loss of traders who bought a token over the past month, shows the typical recent buyer underwater on bitcoin by 10%, ether by 12%, chainlink by 9%, XRP by 8% and cardano by around 18%. The firm labels the first four “fair buy” and cardano “strong buy”.
- jumped 12% in 24 hours after the onchain lending protocol raised $175 million, one of the largest funding rounds in DeFi history, led by Paradigm, a16z crypto and Ribbit Capital with backers including Apollo and VanEck.
- The deal, structured as a token purchase, valued the protocol at up to $2 billion. The token later returned some of the pop.
