The cryptocurrency market displayed stability early Wednesday as Bitcoin managed to bounce back, trading at $112,641.85. Smaller altcoins, particularly IP, MNT, and PUMP, experienced significant gains, registering double-digit increases within the past 24 hours. This surge contributed to the altcoin season index on CoinMarketCap, which rose to nearly 60%, signaling the probable onset of an altcoin season.
Story Protocol’s IP token climbed to over $10 following the strategic decision by Heritage Distillery to incorporate altcoins as treasury assets, aiming to boost IP reserves. Market participants are closely monitoring tomorrow’s U.S. inflation data, which many believe will set the momentum for the next significant movement in asset prices. Analysts at Bitunix pointed out that the intersection of inflation and job revisions currently favors an optimistic outlook on interest rate cuts. They warned, however, that should inflation exceed expectations, it could lead to increased pressure on Bitcoin and Ethereum. Key support levels to keep an eye on are BTC at $108,800 and ETH at $4,250.
In terms of derivatives trading, Bitcoin’s futures open interest remained stable over the last 24 hours, with many traders opting to remain on the sidelines ahead of the U.S. Consumer Price Index (CPI) release. Open interest in Ethereum, Solana, and Hype has seen an increase of over 2%, while capital outflows were noted in XRP, SUI, ADA, and ENA. Annualized funding rates for most leading cryptocurrencies—excluding TRX and XLM—are hovering at or above 10%, suggesting a bullish sentiment without signs of excessive leverage.
On the Chicago Mercantile Exchange (CME), the notional open interest in Bitcoin options has hit a record high of $5.6 billion, although futures activity has remained relatively quiet. On Deribit, Bitcoin and Ethereum puts set to expire in December continue to command a premium over calls, hinting at ongoing downside concerns among traders.
Despite the prevailing sentiment leaning towards bearishness, the crypto market appears to have entered an “altcoin season.” The CoinMarketCap altcoin season index ticked up to 59/100, surpassing the previous month’s high of 57 as traders shifted their focus to more speculative tokens. Market intelligence platform Santiment observed that while prices are trending upward, the overall sentiment is increasingly negative. Traders have adjusted their views, anticipating a pullback in Bitcoin below $100,000, Ethereum below $3,500, and a potential retrace for altcoins.
Altcoins have shown resilience, with Mantle (MNT) and Pyth (PYTH) leading the charge, gaining 15% and 10%, respectively, in the last 24 hours. Meanwhile, Bitcoin continues to hover around $112,500, having traded within the $107,000 to $113,000 range for over two weeks, struggling to break past $124,000. Past instances of altcoin seasons often coincided with periods of Bitcoin consolidation as traders sought to capitalize on speculative assets while avoiding the risk of missing major movements in Bitcoin.
