Bitcoin and the broader cryptocurrency market experienced significant selling pressure during the Asian trading session, leading to a decline to approximately $91,530 at 10:00 a.m. UTC from a local high of $93,750 at midnight.
This sell-off succeeded a failed attempt to surpass $94,500 on Tuesday, marking the third unsuccessful effort in the last five weeks.
The altcoin sector was hit harder than Bitcoin, with PENGU and XRP facing declines of 6.5% and 3.5% respectively since midnight.
Bitcoin is currently trading firmly within December’s range, which saw fluctuations between $85,000 and $94,500, even as it extends its downward trend that commenced in October.
Wednesday’s decline reflects a growing risk-averse sentiment among traders. U.S. equities also saw declines in pre-market trading, with Nasdaq 100 futures trading 0.32% lower since midnight.
Derivatives positioning
- Exchanges have liquidated crypto futures positions totaling $465 million in the past 24 hours, with long positions constituting over 50% of this figure. This contrasts sharply with the previous two days, when short positions faced the most liquidations.
- Nevertheless, total open interest (OI) in global crypto futures remains stable above $143 billion, the highest level in nearly two months, with moderately positive funding rates indicating a bullish sentiment.
- OI in XRP, DOGE, SUI, and ZEC decreased by 5%-6%. This is likely attributed to profit-taking after recent gains in these assets.
- The OI for CME’s BTC futures shows signs of recovery, increasing from 100K BTC to 111K BTC since December 30. Nonetheless, overall positioning remains light compared to last year, when OI was above 191K BTC.
- On Deribit, put skews for BTC and ETH continue to decline, although bullishness has yet to materialize.
- BTC block flows exhibit a mixed profile, with strangles indicating a bullish volatility bias and call spreads suggesting expectations for upward price movement. For ETH, straddles, another volatility strategy, emerged as the preferred approach.
Token talk
- Memecoins and privacy coins were the two worst-performing sectors on Wednesday, with zcash leading the privacy sector, which has dropped by 4.5% since midnight UTC.
- CoinDesk’s Memecoin Index (CDMEME) decreased by 1.5%, roughly double the drop of the CoinDesk 5 index, which tracks the prices of BTC, ETH, XRP, SOL, and ADA.
- One positive note for the altcoin market is the decentralized finance (DeFi) sector, which saw total value locked (TVL) rise by 0.17% over the past 24 hours despite downward asset movements, indicating positive inflows, according to DefiLlama.
- CoinMarketCap’s “altcoin season” indicator is currently at 25/100, dipping slightly from the previous week’s high of 27, yet remaining significantly above December’s low of 14, suggesting a degree of optimism in the altcoin market.
- A notable exception to the downward trend was , which has maintained gains since midnight, showing a 1.2% increase over the past 24 hours.
