The cryptocurrency market is reeling from an overnight sell-off. bitcoinis trading at $69,400, down 2.6% since midnight UTC, while Ether (ETH) is heading back towards the $2,000 level after plummeting 4.1%.
This decline was accompanied by sharp declines in US stocks and precious metals. Nasdaq 100 futures were down about 1%, while gold was down 1.8%.
Meanwhile, oil prices surged back above $100 per barrel as so-called peace talks between the United States and Iran were halted.
Altcoin markets were hit the hardest, with the CoinDesk Computing Select Index (CPUS) and CoinDesk DeFi Select Index (DFX) falling 4.3% and 3.9%, respectively, during the Asian session.
Overall, Bitcoin and the broader cryptocurrency market are still stuck in a price range that has persisted since early February, despite several attempts to break out upwards.
Derivatives Positioning
- The deadlock in negotiations between Iran and the United States appears to have triggered a resurgence of risk aversion, leading to capital outflow from cryptocurrency derivatives. Cumulative cryptocurrency futures open interest (OI) decreased 3.5% to $108.3 billion.
- Open interest on PAXG fell nearly 11% in 24 hours, while gold prices fell 1.8% to $4,423 per ounce. DOGE, ZEC, and TAO are also major open interest decliners.
- Some traders may have taken short positions in BTC futures on major exchanges after the price fell below $70,000 during European hours. This can be seen in the slight increase in open interest (OI) from 229K BTC to 232K BTC on major dollar- and USDT-denominated exchanges.
- ETH, BNB, XPR, SOL, TRX, and DOGE are all showing negative funding ratios, indicating an increased bias towards bears and short positions.
- Meanwhile, CC, TRX, and BCH stand out for their positive positioning with positive cumulative volume deltas, while other major coins, including BTC, are seeing dominant selling.
- In the options market, some traders are trying to protect against a decline in Ethereum by taking risk reversal positions by selling call options to finance the purchase of put options, as TDX Strategies noted in a market note.
- On Deribit, BTC and ETH put options are still priced higher than call options across all maturity bands. In the short term, Ethereum put options are more expensive than BTC put options, suggesting that market participants expect Ethereum’s downside risk to be greater in the short term.
token talk
- Cryptocurrency markets were broadly down on Thursday, but some tokens fell more significantly. AI-focused FET fell 7.7%, while ETHFI and RENDER gave up most of last week’s gains, down 6.3% and 5.9%, respectively.
- The “Altcoin Season” index is currently sitting at 48/100, suggesting a bullish recovery is expected if the market can secure support and move sideways.
- About six of the top 100 tokens are maintaining price gains over the past 24 hours, including Ethena (ENA), up 2.2%, and layer-1 network tokens XDC, NIGHT, and TRX, with gains between 1% and 2%.
- Overall, worryingly low liquidity, which has not recovered beyond the end of 2025, combined with the fickle nature of retail cryptocurrency investors, has the potential to create a perfect storm that could lead to excessive downside across altcoin markets.