In recent trading, Bitcoin (BTC) reached approximately $67,000, having briefly dipped to $66,000 earlier this week. Ether (ETH) also made gains, trading at $1,970 after recovering from a low of $1,924. Both cryptocurrencies experienced a 0.9% increase overnight, but the broader altcoin market lagged behind, indicating a prevailing cautious sentiment among investors. Ether continues to face challenges as it attempts to breach the psychologically significant $2,000 mark.
Following a selloff on February 5, market volatility has decreased, prompting investors to speculate whether this calm is merely a precursor to another downward move or if it signifies the establishment of a macro low before a potential recovery toward 2025 levels.
A recent forum held by World Liberty Financial at Mar-a-Lago, which featured CFTC Chairman Michael Selig and executives from major firms, including Goldman Sachs, did not ignite any bullish enthusiasm in the market. Despite these notable figures in attendance, the macro trend for Bitcoin remains bearish. Since its peak of $126,600 in early October, Bitcoin has recorded a series of lower highs and lower lows, coupled with fluctuating consolidation phases between major shifts.
In terms of derivative positioning, the market appears to be stabilizing, with open interest now holding steady at $15.38 billion. This indicates a shift from a phase of leveraged positions to a more stable foundation. Retail sentiment is showing signs of a slight recovery, as funding rates have turned flat to positive, particularly on platforms like Binance, which is now experiencing a 4% rate. However, institutional investors continue to display cautious conviction, as evidenced by an annualized basis rate of 3% over a three-month horizon.
Currently, the Bitcoin options market exhibits a balance between call and put volumes, with a 50/50 split. Even while short-term dynamics yield an increase in the one-week 25-delta skew to 12%, the term structure for implied volatility (IV) remains in a state of short-term backwardation. The upward spike in the IV curve suggests that traders are paying a “panic premium” for immediate protection, despite longer-dated options stabilizing near a 49% rate.
Coinglass data reveals that approximately $218 million was liquidated in the last 24 hours, with a discernible 77-23 split between long and short positions. Bitcoin led the charge with $75 million in liquidations, followed by Ether at $53 million, while other cryptocurrencies accounted for $22 million. Notably, the Binance liquidation heatmap highlights $67,400 as a critical level to monitor in the event of a price rise.
The altcoin segment is beginning to show signs of distress amidst a low-liquidity trading environment. WLFI saw a significant drop of over 10% following a “sell the news” response to Wednesday’s forum. Axie Infinity (AXS) is approaching its lows from February 6, having decreased 5.9% since midnight UTC. Moreover, the lending platform Morpho’s native token, MORPHO, has retraced all its gains from Wednesday, currently valued at $1.39 after a 4.2% decline overnight.
Overall, the sentiment in the cryptocurrency market remains grim, with 97 of the top 100 cryptocurrencies, excluding stablecoins and tokenized gold, reporting losses over the past 24 hours. This pervasive pessimism is further underscored by the fear and greed index, which currently stands at 11 out of 100, a slight improvement from February’s low of 6 out of 100.
