The cryptocurrency market is experiencing a positive shift on Monday as bitcoin climbed to $93,350, marking its highest point since December 11, before retracting slightly.
The primary surge transpired at midnight UTC, coinciding with the commencement of bitcoin futures trading on the CME exchange, creating a “gap” between $90,500 and $91,550.
Historically, these gaps are commonly filled over a few days, suggesting that the price may revert to the $90,500 mark at some point this week.
Traders are focusing predominantly on bitcoin rather than altcoins, as the leading cryptocurrency rose by 1.33% since midnight, while the CoinDesk Meme (CDMEME) and Metaverse (MTVS) indices dropped 6.4% and 2.3%, respectively, over the same timeframe.
Equities and precious metals experienced gains overnight, hinting at a risk-on sentiment following the recent U.S. actions in Venezuela.
Derivatives positioning
- In the last 24 hours, exchanges liquidated leveraged crypto futures positions valued at $260 million, primarily affecting shorts. This indicates that leverage was biased bearish and traders were taken by surprise by the increase in prices.
- Open interest (OI) in BTC, along with its derivatives as well as XRP and BNB has risen by 2% to 5% over the past 24 hours, while ETH, SOL, DOGE, and ZEC have exhibited flat to negative OI. These varying trends indicate that investors’ risk appetite has only improved for a select few coins.
- Exempting BCH, BTC, BNB, and XLM, the OI-adjusted cumulative volume delta for other top 20 coins has shown a negative trend in the last 24 hours, suggesting net selling pressure in the market.
- BTC’s annualized perpetual funding rates have exceeded 10%, indicating growing demand for bullish exposure. Conversely, rates for many altcoins remain below zero.
- On Deribit, the sentiment towards BTC puts has softened across the board, with traders pursuing calls at the $100,000 strike price.
- Recent block flows showed put spreads in BTC and call spreads in ETH.
Token talk
- While traders are focused on bitcoin, several tokens still managed to outperform the broader market on Monday.
- This includes the recently launched LIT, the native token of the perpetual exchange Lighter, which has gained 3.9% since midnight, and AI-focused FET, which carried on its weekend rally with a 7.4% increase since midnight.
- However, caution remains, as the average crypto relative strength index (RSI) indicates a score of 58/100, suggesting its entry into “overbought” territory. This signals a potential short-term pullback as those in profit might take the opportunity to secure their gains.
- Some tokens were unable to benefit from the overnight rally: Zcash has slid by 2.5% since midnight, and memecoins Doge (DOGE) and Pepe (PEPE) saw declines of 1.4% and 4.5%, respectively.
- The mixed performance in the altcoin market illustrates two key points: traders’ indecision and a persisting lack of liquidity that has plagued the crypto market since the liquidation event in October.
