Bitcoin continues to experience a slight decline, trading at approximately $110,992.71. This marks a drop of about 0.7% over the past 24 hours and reflects a more pronounced downturn since midnight UTC, with a decrease of nearly 0.9%. The broader cryptocurrency market has also felt the impact, with the CoinDesk 20 Index declining by 1.3%. Notably, XRP is the only token that has managed to stay in the green, up by less than 0.1%.
Amidst this bearish sentiment, the options and perpetual futures markets reveal growing caution among traders. Perpetual funding rates have decreased, and put options, serving as a hedge against price declines, are gaining traction over call options. A substantial $4.5 billion in options is set to expire on Deribit this Friday, which coincides with the U.S. jobs report for August. According to a recent post from the derivatives exchange, “Open interest is tilted toward puts, with notable clustering around the $105,000 to $110,000 strikes, suggesting downside protection remains a key theme.”
Despite a slowdown in overall trading activity, there remains a prevailing interest in BTC derivatives. Open interest in perpetual futures across major venues has decreased from a recent peak of nearly $33 billion to around $30 billion. The three-month annualized basis has compressed to approximately 5%–6% among exchanges such as Binance, OKX, and Deribit, raising concerns about the profitability of carry trades.
Interestingly, while indicators suggest a bearish outlook in the short term, options data presents mixed signals. The upward-sloping implied volatility curve points to expectations of higher long-term volatility, but short-term metrics indicate a potential downturn. The 25 delta skew remains either flat or slightly negative, demonstrating that traders are willing to pay a premium for puts over calls to secure downside protection. Nonetheless, 24-hour put/call volume shows a dominant preference for calls, with an allocation of 63%.
Funding rate annual percentage rates (APRs) across major perpetual swap venues remain relatively stable at around 4%-6%, with Hyperliquid being the exception, showing a rate exceeding 6%. This suggests that while the market is stable overall, there are isolated pockets of increased long-term interest.
Data from Coinglass reveals $225 million in liquidations over the past 24 hours, equally split between long and short positions. Ethereum leads the pack of liquidations, followed by Bitcoin and other assets. The Binance liquidation heatmap indicates that $110,250 serves as a critical threshold to monitor in the event of further price drops.
In the realm of decentralized finance, the Donald Trump-linked DeFi token, word liberty financial (WLFI), has slumped to a record low of $0.174. This 21% drop in a single day can be attributed to fading interest in the token shortly after its debut. Despite some holders realizing profits from early purchases during the token sale, many others appear to be selling amidst dwindling project enthusiasm.
One trader reportedly made an impressive $250 million after purchasing $15 million worth of the token during the sale, while another faced a staggering loss of $2.2 million from going long on WLFI futures. Despite its political associations, WLFI lacks distinctive features and innovative developments that could set it apart from numerous other DeFi-themed tokens, leading traders to reconsider their positions.
In an effort to curb the ongoing selling pressure, the WLFI project team announced that tokens held by the team would not be sold on the open market, and all tokens in the treasury would be subject to governance decisions rather than team discretion. This statement, however, failed to stabilize prices, leading to further declines shortly thereafter.
Market observers note that WLFI’s trajectory mirrors that of the TRUMP memecoin, which saw an initial surge followed by a sharp decline of 89%, from $39 billion in daily volume on opening day to a meager $210 million in the past 24 hours. The community is increasingly vocal about its concerns, urging the WLFI team to take decisive action to restore investor confidence.
