The cryptocurrency market saw a “sell the news” response to the Federal Reserve’s interest-rate reduction and the U.S. trade agreement with China, with bitcoin retracting back to the $110,000 support level.
Traders are now contemplating whether the recent peak just under $116,000 will set a new lower high compared to the $126,000 bitcoin reached at the start of the month, indicating the beginnings of a downtrend and potential reversal.
Bitcoin dominance decreased slightly on Thursday, suggesting that some altcoins are outperforming BTC despite the general market weakness observed among major cryptocurrencies.
Derivatives Positioning
By Saksham Diwan
- Following Bitcoin’s post-Fed news price decline, the BTC futures market remains robust: Open interest (OI) has increased marginally to $27.2 billion, indicating minimal liquidations and rapid re-entry of buyers.
- Notably, the previously polarized funding rates have now normalized, trending toward neutral and nearly flat across most platforms, reflecting underlying market stability and a more measured sentiment compared to the previous uncertainty.
- The BTC options market retains a strong bullish bias, although short-term optimism has tempered.
- The implied volatility (IV) term structure still shows near-term backwardation before transitioning to long-term contango. The one-week 25-delta skew has decreased to 8% from 10% yesterday, with traders still paying a significant premium for short-term call options.
- This reduction in conviction is evident in the 24-hour put-call volume ratio, which remains bullish at 55:44 in favor of calls.
- Coinglass data indicates $821 million in liquidations over 24 hours, with a 79-21 distribution between longs and shorts.
- BTC ($368 million), ETH ($188 million), and others ($52 million) led in notional liquidations. The Binance liquidation heatmap shows $109,700 as a critical liquidation level to watch in the event of a price decline.
Token Talk
By Oliver Knight
- Over $80 billion was erased from the total cryptocurrency market cap in the last 24 hours, as traders “sold the news” after the Fed’s interest-rate cut and the trade deal between the U.S. and China.
- Bitcoin and ether , the two largest cryptocurrencies, have both decreased by 2.5% as they test their support levels. XRP and XLM were notably the poorest performers among the top 20 tokens, losing 3.5% and 3.3%, respectively.
- Plasma continues to draw negative attention, plummeting 14% in 24 hours, accumulating an overall loss of 81% since September 28.
- One small ray of hope in the altcoin market was TRUMP, the memecoin associated with the U.S. president, which surged 6.8% after reports surfaced that Fight Fight Fight, the firm behind the token, is planning to acquire U.S. fundraising platform Republic.
- TRUMP has risen by 45% this week, although it still trades at $8.40, significantly below its record high of $45.47.
- Bitcoin dominance decreased slightly from 59.3% to 59.0%, indicating that certain altcoins are outperforming bitcoin in this recent sell-off.
