The crypto market faced another surprising sell-off on Thursday, with several altcoins facing double-digit moves to the downside as BTC and ETH began to challenge critical support levels.
The move appears to be a continuation from the weekend’s $500 billion bloodbath, with traders moving more cautiously to avoid another potential liquidation cascade.
Derivatives Positioning
- The BTC Futures market continues to stabilize, with open interest holding firm around $25 billion. The 3-month annualized basis remained steady, trading in the 5-6% range. However, a notable difference in funding rates highlights a mixed sentiment in the market; Binance and OKX already have negative funding rates of -2% to -3%, while other platforms are either flat or slightly positive. This negative fund on the major exchanges indicates that a large number of traders are holding short positions, suggesting a level of conviction despite strong open interest and fundamentals.
- The BTC options market is showing a strong bullish signal. 24-hour placement/call volume is now roughly balanced, indicating robust demand from both sides. However, the most significant metric is the 1-week 25 delta skew, which emerged at 12.62%, suggesting that traders are willing to pay a large premium for call options and aggressively positioning for a price increase.
- Coinglass data shows $415 million in 24-hour liquidation, with a 70-30 split between longs and shorts. ETH ($115 million), BTC ($80 million) and others ($43 million) are the leaders in terms of notional liquidations. The Binance Liquidation Heatmap indicates $110,009 as a key liquidation level to monitor, in case of a price collapse.
Token talk
By Oliver Knight
- Altcoins were dealt another day or decimation on Thursday as some assets faced double-digit declines.
- Aster And Lido (LDO) all fell between 12% and 13% in the past 24 hours, including CoinmarketCap’s “Altcoin Season” index Sliding to 27/100, its lowest point in more than three months.
- Crypto Majors BTC and ETH are still around support levels at $110,000 and $4,000, although sentiment has turned bearish after the market failed to recover from last week’s $500 billion wipeout.
- An outlier from Thursday’s sale was which rose from intraday lows of $0.312 to $0.322 as it begins to show strength and signs of recovery.
- There are many catalysts behind the recent sell-off; Remarkable Distribution from long-term Bitcoin holderswhich created an environment of heavy selling pressure accompanied by a lack of demand.
- Altcoins are often negative recipients from the downside in bitcoin levels and liquidity, especially following the weekend rally, remains low. This means that when a sell occurs, prices quickly take support levels until sufficient liquidity is found to meet the demand of the sellers.
