The cryptocurrency market faced significant selling pressure on Tuesday, with bitcoin and ether retreating from a more secure range into levels that may lead to a challenge of several months’ lows for the two largest cryptocurrencies by market capitalization.
BTC is currently priced at $107,800 while ETH stands at $3,867, recovering from a weekend surge before retracting gains on Tuesday.
Analysts are now evaluating whether the cryptocurrency market has formed a “lower high” pattern that suggests a continuing downturn. A key indication would be a fall in bitcoin below the Oct. 17 low of $103,700.
Derivatives Positioning
- The bitcoin futures market indicates a measured recovery, with open interest rising to $26.06 billion as traders gradually return to the market.
- The three-month annualized basis remains stable in the neutral-to-bullish range of 5%-6%. Notably, funding rates have reverted to being mostly neutral or positive, suggesting that the previous short-side conviction has dissipated. OKX is leading this shift with a high positive rate of 7.51%.
- The BTC options market shows strong bullish sentiments, driven by rising expectations of future price fluctuations. The implied volatility term structure is climbing, indicating market expectations for increased volatility over time.
- Simultaneously, the 25-delta skew is rising across all timeframes, now exceeding 11.86%. This high positive skew reveals that traders are paying a significant premium for upside exposure—call options—demonstrating strong confidence in a prolonged rally, despite the nearly balanced 24-hour put-call volume, which is 49%-51% favoring puts.
- Data from Coinglass reveals $320 million in liquidations over the past 24 hours, with a 76%-24% split between longs and shorts. BTC ($88 million), ETH ($85 million), and others ($33 million) led in notional liquidations.
- The Binance liquidation heatmap highlights $112,300 as a key liquidation level to watch for potential price increases.
Token Talk
By Oliver Knight
- South Korean exchanges Upbit and Bithumb have listed various lower market cap tokens on Tuesday, triggering a series of significant upward movements.
- Upbit notably included trading pairs with won and dollar. SynFutures is a decentralized derivatives exchange aiming to compete with HyperLiquid and Aster.
- Following its listing, F surged more than 50% before retracting some of its gains. Trading volume increased by 669% to exceed $200 million.
- Bithumb also listed ZORA and RECALL. ZORA surged by over 10%, while RECALL performed in alignment with the broader market.
- The post-listing increases diverged from the overall altcoin market trend on Tuesday, where multiple assets experienced double-digit declines. The CoinDesk 80 Index dropped 4.5% in the last 24 hours.
- CAKE and ETHFI both depreciated by 10%, while ETH, BNB, and SOL fell by 4%-5% as negative sentiment returned to the market.
- Traders are currently assessing whether the weekend’s market bounce resulted in a lower high, which could signify a bearish trend and a potential reversal following new record highs established less than a month ago.
