The cryptocurrency market has reached a pivotal support level, with Bitcoin (BTC) trading at approximately $59,700, showing little movement since midnight UTC. This comes after the largest cryptocurrency rebounded from a recent low of $58,100, its lowest point since September 2024. Ethereum (ETH), on the other hand, has not followed suit, experiencing further declines and recently trading around $1,550, marking the third consecutive day of losses.
In tandem, U.S. equities are facing weakness as futures for the Nasdaq 100 and S&P 500 fell by 1% and 0.4%, respectively, continuing a trend from the tech rally that characterized the past three months. Amid the overall bearish sentiment, Aave (AAVE) managed to stand out, gaining 6.8% since midnight and building on a 17% increase over the last week. This rise follows reports that the crypto exchange Kraken is seeking to acquire a 15% stake in the decentralized finance (DeFi) company.
In the derivatives market, the volatility is continuing to pressure leveraged futures positions. Over the last 24 hours, an additional $1 billion in positions has been liquidated, largely consisting of long positions. Interestingly, Ethereum experienced a higher volume of liquidations compared to Bitcoin within the past 12 hours. Bitcoin futures open interest (OI) rose for the second consecutive day to reach 778,000 BTC, recovering from recent lows near 730,000 BTC. The increase in open interest occurred during Thursday’s late selloff, suggesting that traders were placing short positions in anticipation of further decreases.
Conversely, the open interest in Ethereum futures has remained stable around 14 million ETH since mid-June, a sign that traders may not be significantly betting against the currency’s price decline. A similar trend is evident in XRP, while Solana’s open interest has decreased from record highs but remains high in a broader context, indicating potential continued volatility. The OI-adjusted 24-hour cumulative volume delta reveals a prevailing bearish sentiment across most top cryptocurrencies, with the notable exceptions being BNB, SOL, and TON. This bearish dominance has been accentuated since Tuesday, where market orders have been favored over passive limit orders.
Overall market sentiment reflects increasing apprehension, with annualized 30-day implied volatility indexes showing rising concern. Bitcoin’s volatility index climbed to 53%, marking its highest level since early June, while Ethereum’s index reached 66%. The comparable VIX on Wall Street recently rose to 20% from 15%, although this remains within a relatively stable range since April, indicating a lack of outright panic. The same caution is echoed in the U.S. Treasury market’s implied volatility index.
On the derivatives platform Deribit, the one-week bitcoin options skew is nearing 30%, suggesting a significant demand for puts over calls, further illustrating fears of downside risks. Large trades have been noted, including a substantial transaction involving a $53,000 put option expiring on July 10 and increasing interest in ether risk reversals.
Among altcoins, Aave recorded significant gains, and Solana (SOL) also made a modest recovery, trading around $68.95 after previously dipping to $64.05. However, AI-related tokens have struggled, with RENDER, NEAR, FET, and TAO all losing between 1% and 1.5%, continuing their recent declines. Hyperliquid (HYPE) also fell by 2.6%, extending a downturn that has seen it lose 18.5% since reaching a record high 12 days ago. Meanwhile, Ethena (ENA) remains one of the worst-performing altcoins, dropping another 5% and losing 34% since hitting a monthly peak on June 3. ENA’s downturn is attributed to broader market trends, with a portion of its yield-generation strategy linked to positive funding rates, which have now turned negative.
