The cryptocurrency market struggled to rebound after Monday’s sell-off. Bitcoin is trading 4% lower at $86,100, while ether has fallen back below $3,000 after a 6.7% decline in 24 hours.
This downturn pushed the CoinDesk 20 Index down by 4.3%, with all index constituents experiencing losses, coinciding with declines in traditional markets. The Nasdaq Composite dropped for a second consecutive day on Monday, losing 2.6%, amid worries about a potential AI bubble and weak employment data. The U.S. is expected to release labor market statistics, including November’s nonfarm payrolls figure, later on Tuesday.
“Consensus forecasts indicate around 50,000 new jobs were created, less than half the 119,000 reported in September, although the expectations range is broader than usual,” said Derren Nathan, head of equity research at Hargreaves Lansdown, in an email.
“If recent private job data is any indication, the risk appears to be to the downside.”
The cryptocurrency market has notably underperformed equities since the October downturn, partly due to a liquidity shortage that continues to amplify general price fluctuations.
Derivatives positioning
- Volmex’s one-day BVIV, which gauges expected annual price volatility over 24 hours, remains stable above 50%. This indicates a normal 24-hour move of 2.6%, even with significant economic data on the horizon.
- Exchanges liquidated over $660 million in leveraged futures positions over a 24-hour period, most being long positions, clearing bullish leverage from the market.
- The total global open interest (OI) in BTC futures surpassed 700K BTC, marking the highest level since November 21. An increase in OI along with a drop in spot price suggests an influx of bearish short positions, confirming a downward trend.
- XRP’s futures OI increased to 1.96B XRP, the highest since October 11.
- The OI-adjusted cumulative volume delta for most major tokens declined, highlighting aggressive net selling pressure.
- On Deribit, BTC and ETH put options continue to be more expensive than calls, reflecting ongoing concerns about downside risks. The enduring put premium also arises from institutional interest in call overwriting strategies.
- The $85K bitcoin put option has become the second-most sought after, following the $100K call option.
- Block activity showcased BTC put diagonal spreads, put ratio spreads, and straddles, while traders in ETH preferred put butterflies.
Token talk
- The altcoin market is eagerly looking for a bullish trigger following two months of corrective price movements.
- ASTER, ONDO, and STRK each lost over 10% in the last 24 hours, lagging behind the broader market.
- A silver lining for the altcoin sector is that several tokens are now considered “oversold,” according to the average crypto relative strength index (RSI) indicator.
- This suggests the market might prepare for a slight rebound before the U.S. employment figures are disclosed.
- Several tokens including XRP, SOL, and ADA are approaching critical support levels that have previously prompted a series of local bottoms over the past year. Therefore, despite low altcoin sentiment, this could represent a potential area for renewed investor interest.
