Bitcoin (BTC) has recovered from early lows in the Asian session around $108,760, rising past $110,000. However, the likelihood of a sustained rebound looks grim, as on-chain data indicates weak network adoption.
“Price momentum is fading, with the RSI approaching the oversold territory and a bearish MACD,” noted Timothy Misir, head of research at BRN. “The Spot CVD at –$199 million suggests sellers are currently in control, with spot volume indicating a lack of buying interest. Additionally, Daily Active Addresses have dropped to 692K (below the lower band), reflecting diminished network activity.”
The overall market remains under strain, with the CoinDesk 20 and CoinDesk 80 indices down 2% and 1.7% over the past 24 hours.
Derivatives Positioning
- Leveraged crypto bulls have faced significant losses, with futures positions worth $940 million liquidated in the last 24 hours. Over $800 million of this were long positions betting on rising prices, with Ether alone contributing $320 million to the liquidations.
- Nevertheless, overall open interest (OI) in BTC stays high, hovering near all-time peaks above 740K BTC. In contrast, ether OI has decreased to 14 million ETH from 14.60 million ETH.
- OI in SOL, XRP, DOGE, ADA, and LINK also saw declines in the past 24 hours, indicating net capital outflows.
- Despite the market volatility, funding rates for most major tokens, except for SHIB, ADA, and SOL, remain positive, indicating a prevalence of bullish long positions.
- The open interest in CME-listed standard BTC futures has fallen to 137.3K from 145.2K, reversing the slight increase observed earlier this month, indicating limited institutional interest in these regulated derivatives. However, OI in options has continued to rise, reaching its highest level since late May.
- CME’s ether futures OI is also substantial at 2.05 million ETH, just shy of the record 2.15 million ETH reached on August 22. Meanwhile, ether options OI has hit its highest level since September of last year.
- On Deribit, the upcoming multibillion-dollar expiry on Friday shows a preference for BTC puts, signaling concerns that prices may further decline. In contrast, the ether expiry presents a more balanced outlook.
- OTC flows at Paradigm have been varied, with tactics involving outright put buying and put spreads in BTC, as well as calls and risk reversals in ETH.
Token Talk
- Top-tier NFT collections encountered significant weekly losses as ether (ETH) retracted from record levels, resulting in a more than 10% decrease in the value of many leading projects.
- Pudgy Penguins, the top collection by trading volume, fell 17% to a 10.32 ETH floor, demonstrating that even the strongest liquidity draw in the sector was unable to withstand the downturn.
- Bored Ape Yacht Club (BAYC) dropped 14.7% to 9.59 ETH, while Doodles experienced one of the sharpest declines, plummeting 18.9% to 0.73 ETH.
- Secondary projects also suffered: Moonbirds fell 10.5%, and Lil Pudgys dropped 14.6%, illustrating how price pressure impacted both flagship and derivative collections.
- CryptoPunks remained the most resilient, losing only 1.35% over the week, reaffirming its role as the market’s defensive benchmark in times of declining risk appetite.
- Despite lower floors, trading activity remained robust. Pudgy Penguins recorded 2,112 ETH ($9.36 million) in weekly volume, followed by Moonbirds (1,979 ETH), CryptoPunks (1,879 ETH), and BAYC (809 ETH).
- The overall NFT market capitalization shrank nearly 5% to $7.7 billion, down from a $9.3 billion peak on August 13. This $1.6 billion decline highlights how swiftly capital exits the market when ETH dips.
- The stark contrast between resilient CryptoPunks and declining newer collections enhances its attractiveness as a collateral asset, as its liquidity remains stable even when broader NFT floors falter.
- For investors, the sell-off signals that NFT blue chips continue to serve as high-beta ETH proxies, with only legacy projects like CryptoPunks demonstrating the defensive qualities that make them a safer long-term institutional investment.
