Bitcoin experienced a notable decline, dropping to its lowest point since April 7 on Tuesday, falling below the $70,000 mark. The largest cryptocurrency by market capitalization has been in a continuous downswing since Sunday, with seven out of the past eight four-hour trading periods closing in the red. As a result, Bitcoin is down over 2% from midnight UTC.
The situation was further exacerbated by concerns surrounding the Bitcoin strategy of MicroStrategy (MSTR), which recently sold $2.5 million worth of Bitcoin. This sale raised apprehensions about potential future sales, especially after the transfer of $30 million in Bitcoin to a Coinbase Prime wallet last week.
Ethereum mirrored Bitcoin’s trajectory, losing approximately 1.7% since midnight UTC and remaining below the critical $2,000 threshold. However, amidst this bearish sentiment in major cryptocurrencies, some sectors appeared to flourish. Specifically, tokens related to artificial intelligence witnessed a surge in interest, with Humanity Protocol (H) gaining 18% in a single day and achieving a remarkable 278% increase since May 28.
Contrasting with this upward momentum, Stellar (XLM) fell over 6% since midnight, continuing to pull back from a previous 102% surge last month. Other altcoins such as SUI and ETHFI also saw declines of around 3% each.
On the derivatives front, Bitcoin’s open interest remained stable at $19.2 billion, with speculative positions largely unchanged. Funding rates across various platforms were reported between 0% and 10% annualized. Notably, the three-month annualized basis increased to around 3%, rising from 2.4% the previous week, which reflects a mild increase in institutional risk appetite.
Options trading exhibited mixed signals. The recent put/call volume was skewed 65/35 in favor of calls, yet the one-week 25-delta skew jumped from 11% to 17%, indicating a heightened demand for downside protection among traders. Meanwhile, front-end implied volatility has rebounded to 39, reversing a multi-month downturn in volatility.
Liquidation data revealed a total of $768 million in the past 24 hours, split 84% on long positions and 16% on short positions. Bitcoin accounted for the majority of these liquidations at $448 million, while Ethereum followed with $92 million. Traders are closely monitoring the liquidation heatmap, with the $68,600 level identified as critical should prices continue to decline.
Within the AI sector, tokens such as Humanity Protocol (H) and Near Protocol (NEAR) showcased strong performance, gaining 8% and 14.5% respectively over the past 24 hours, although NEAR remained flat after profit-taking. The AI-focused CoinDesk Computing Select Index (CPUS), however, registered a loss of 1.7%, primarily dragged down by its largest component, Chainlink (LINK), which fell 2.5%.
In the decentralized finance (DeFi) space, the total value locked across all protocols has dropped to its lowest level since October 2024, currently resting around $78 billion following a 1.85% decline in the past day. This slump indicates that the liquidity recovery many had hoped for this year has yet to materialize, particularly after a spate of security breaches in the sector.
In a sign of shifting dynamics in the altcoin market, CoinMarketCap’s “Altcoin Season” index has risen from 38 to 45, suggesting a growing separation from Bitcoin’s performance as altcoins begin to gain traction.
