Cryptocurrency markets experienced a significant downturn over the last 24 hours, with the CoinDesk 20 Index (CD20) declining by 1.7%. The sell-off was influenced by a downturn in U.S. equities, triggered by tech giants Meta and Microsoft raising their AI investment forecasts, causing concerns over increased expenditures.
Bitcoin, trading at approximately $109,733.86, showed minimal movement among the top cryptocurrencies, slipping just 0.2% and hovering below the $110,000 mark on the anniversary of its white paper release. Meanwhile, ether dropped 1.3%, settling at around $3,840 as the altcoin market faced overall weakness heading into the weekend.
Analysis of derivatives markets revealed mixed signals. Despite Bitcoin futures showing no clear directional trends—open interest slightly below $26.16 billion and funding rates staying relatively stable—options trading indicated a shift towards a neutral-to-bearish sentiment in the short term. However, there remains an underlying positive structural bias, highlighted by a premium for short-term call options.
In detail, the bitcoin futures environment appears consolidated for now, with a notable lack of momentum. Funding rates across various exchanges have maintained their status quo, suggesting a low appetite for immediate demand. Contrastingly, platforms such as Deribit reported a surge in funding rates to an annualized 8%, indicating isolated bullish demand. The three-month annualized basis fluctuates within the uninviting 4%-5% range, reflecting a less appealing basis trade landscape. Options positioning has also shifted towards a neutral to bearish outlook, although a positive structural bias persists. The implied volatility structure demonstrates a development transitioning from short-term backwardation to long-term contango, while a positive one-week 25-delta skew indicates a premium on short-term calls. Yet, recent trading volume for puts versus calls has swung to 56%-43% in favor of puts, suggesting that hedging against potential downturns is currently taking precedence.
Further insights from Coinglass revealed a staggering $879 million in liquidations over the past 24 hours, primarily skewed towards long positions by an 86-14 margin. Notable liquidations included Bitcoin at $303 million and Ethereum at $193 million. Monitoring the Binance liquidation heatmap indicates a key liquidation level at $111,000, which could signal significant moves should prices rise.
On the altcoin front, the market concluded the week lower, with ether slipping to $3,840 after a 1.3% decrease. Numerous tokens breached pivotal support levels during this period, resulting in downward pressure across the board. The CoinDesk 80 Index, representing the smaller segment of the top 100 tokens, suffered a 3.8% drop, while the broader CD20 fell by 1.3%.
Several tokens, such as Doublezero (2z), plasma XPL, gate token (GT), and ENA, exhibited declines between 15% and 21% after extending their losses on Friday. In contrast, the privacy coin ZEC saw a notable increase of 5% on Friday, bolstering its weekly gains to 47%. Additionally, the TRUMP memecoin surged by 35% over the past week, spurred by news of the company’s intentions to acquire fundraising platform Republic.
The outlook for the altcoin market heavily hinges on ether’s ability to maintain its support around the $3,700 mark, which has previously demonstrated resilience. A breach below this critical level could signal weakness, potentially indicating a macro trend reversal that may ripple through the broader altcoin landscape.
