Major cryptocurrencies are experiencing a noticeable uptick in trading momentum following the recent interest-rate cut by the Federal Reserve on Wednesday. Bitcoin, trading prominently at around $117,179.76, along with ether (ETH), XRP (XRP priced at $3.1219), and solana (SOL at $246.45), are all showing positive signs. However, a level of caution remains among analysts who suggest that the current rally, while temporarily invigorating, may not be entirely robust.
Timothy Misir, head of research at BRN, noted in an email that the Fed’s rate reduction provided a short-term boost to the crypto market, though he expressed reservations about the sustainability of the rally. “Institutional flows are supportive overall, yet exchange inflows and a single-day ETF outflow signal distribution into strength,” Misir observed. He advised traders to maintain a price band for bitcoin between $115,000 and $115,500 to manage tactical risk effectively.
In the realm of derivatives, notable cryptocurrencies like BNB, AVAX, and DOT have seen their futures open interest (OI) surge by double digits within the last 24 hours, resulting in price increases between 5% and 9%. Conversely, Bitcoin’s cumulative OI across USD and USDT-denominated perpetual futures is on a downward trajectory, suggesting that derivative traders may not be fully engaged in the current upswing. Meanwhile, BCH, TRX, BNB, BTC, XMR, AVAX, and SUI have demonstrated a positive adjusted cumulative volume delta, indicating continued buying pressure.
Interestingly, there are no indicators of overheating in the broader crypto market, as the annualized funding rates for smaller speculative tokens hover around 10%. On the CME, OI in ether futures is nearing the 2 million ETH mark, signifying active trading interest, whereas BTC futures OI appears relatively light. The annualized three-month basis for both bitcoin and ether remains under 10%, providing a lower yield for carry traders when compared to SOL’s more lucrative 17% return.
Over on Deribit, options data reveals a neutral to bearish bias for 25-delta risk reversals stretched out to March expiration, contrasting with the bullish sentiment for ether options across all tenors. In the over-the-counter market via Paradigm, there has been significant demand for a $116K call set to expire on September 19 and a $100K put slated for October 31.
The altcoin market has witnessed a vigorous rebound, particularly following the oversold Relative Strength Index (RSI) readings from Wednesday. Several altcoins have surged past 10% in gains, with ether.fi (ETHFI) leading the way, up 12% in the past 24 hours to reach $1.64—its highest price since January. BNB also hit a significant milestone, surpassing $1,000 for the first time, while Bitcoin inches closer to $117,300, stabilizing above critical support at $110,000. Notably, bitcoin dominance has diminished to 56% at CoinMarketCap—the lowest since early January—indicating a rising interest in more speculative assets.
The decentralized finance (DeFi) sector is among the primary beneficiaries of the recent uptick, with the total value locked (TVL) across all protocols reaching $170 billion, the highest since April 2022. Notably, Hyperliquid’s layer-1 blockchain has hit a record high of $2.77 billion, reflecting a 3.88% increase in the last 24 hours, while Sui’s TVL has also risen by 3% to $2.1 billion. This overall landscape suggests an evolving and dynamic market, as cryptocurrencies and decentralized platforms continue to engage investors with diverse strategies and opportunities.
