The cryptocurrency market remained volatile on Friday, with bitcoin fluctuating between $88,000 and $94,000 during a week marked by the Federal Reserve’s decision to lower interest rates by 25 basis points.
Typically, interest rate cuts are perceived as positive for risk assets like bitcoin, as they encourage investors to explore returns outside of fiat currencies like the dollar.
However, bitcoin and the overall crypto market didn’t behave as anticipated, with BTC dropping below $90,000 after the rate cut before rebounding to the higher end of its range. The CoinDesk 20 Index has risen 0.57% since midnight UTC.
The altcoin market appears relatively weak, with several tokens including , and experiencing double-digit declines this week.
Derivatives positioning
- BTC’s 30-day implied volatility, indicated by Volmex’s BVIV index, has dropped to its lowest level since November 10. Traders seem to expect erratic price movements in the final weeks of 2025.
- The ether volatility index has reached its lowest point since late October.
- On Deribit, the put bias for BTC and ETH remains consistent across all time frames.
- Block flows indicated a preference for calendar spreads in BTC and ETH.
- In the futures market, ZEC’s open interest (OI) has increased by 16% to 2.28 million ZEC, approaching its record high of 2.32 million ZEC.
- HYPE, SUI, and SOL have also recorded significant OI growth over 24 hours, suggesting renewed capital inflows. OI has remained mostly stable for BTC and ETH.
Token talk
- Privacy coins have continued to excel in the altcoin market, with zcash leading with a 9% increase in the last 24 hours.
- Notable intraday recoveries were seen for AAVE, HYPE, and LIDO, but overall performance over the past week remains subdued.
- CoinMarketCap’s “altcoin season” indicator has dropped to a cycle low of 16/100, indicating that traders are hesitant to engage with the speculative altcoin market.
- This persistent underperformance is highlighted by CoinDesk’s Memecoin Index (CDMEME), which is down by 59% year-to-date compared to the CoinDesk 10 (CD10) that has lost 7.3%.
- The decline of the memecoin market, once the cornerstone of hype-driven crypto speculation, signifies a shift in investor behavior over the past year.
- While the market was once characterized by retail investor dominance, the rise of ETFs and digital asset treasury (DAT) firms has shifted that demand, leading to more stable price trends.
