The crypto market is facing one of its toughest tests, along with bitcoin The price breach below the important $98,000 support level followed a wave of selling pressure in a low-liquidity environment.
The sell-off prompted more than $1.1 billion in liquidity, nearly half of what happened in Bitcoin trading pairs, according to Coinglass.
The altcoin sector performed even worse, with ether Falling 9% in 24 hours as a number of altcoins traded double digits moving to the downside. The Coindesk 20 index slipped 8% with even the best performance, loss of 3%.
Crypto’s plunge coincided with a sell-off in equities. NASDAQ FUTURES (NQ) lost 2.95% of their value in the last 24 hours.
Derivatives Positioning
By Omkar Godbole
- Bitcoin’s 30-day implied volatility index, BVIV, which surged at an annualized 50%, at Asian time, returned to 47.8% even as the spot price remains near daily lows of nearly $97,000.
- This indicates that despite the recent sell-off, there was no panic buying of options, indicating a more measured market response.
- Ether’s Volatility Index paints a similar picture.
- Open interest (OI) on futures tied to BTC remains flat while OI on ETH, SOL, XRP, SUI, ADA, LINK, UNI and most other tokens declined by more than 5% in a sign of capital outflows.
- On the CME, Ether Futures’ premium fell to 4.26%, the lowest since April, while BTC remains somewhat elevated above 5%. This is a sign of reduced demand for ETH relative to BTC, even though the price of ETH has risen against BTC.
- The market boosted the demand for BTC and puts ETH on the debit. BTC block flows featured put spreads and returns at risk. In the case of ETH, enter the spread and enter the diagonal calendar spread led flow.
Token talk
By Oliver Knight
- The altcoin market was dampened by a low liquidity that sold on Friday as ether slipped more than 9% in 24 hours and tokens including AAVE , and Lost more than 10%.
- More than $1.1 billion worth of derivatives positions were liquid during the same period, $510 million of which was attributed to Bitcoin, according to Coinglass.
- Many altcoins have now fallen to multi-month lows. AAVE is now trading at its lowest point since May and ETH at its lowest since July.
- The Altcoin market will depend on whether Bitcoin, the anchor of the market, can fight out of danger and return above the $98,000 support level.
- Failure to do so would confirm a downtrend and potential bear market return from the October high of $126,000.
- There is a glimmer of hope for altcoins: the privacy coin sector. Zcash and Monero both were in the green on Friday as they decried market pressure.
- ZEC is now up more than 1,000% since August as investors come full circle, back to a Narrative centered on libertarian politics on imaginary gains.
