Bitcoin’s rebound on Wednesday to $144,700 was short-lived as long-term market sentiment indicators shifted bearish for the first time since June 2023. DOGE, XRP, and SOL mirrored this movement, whereas ether showed more resilience.
Nonetheless, at the time of reporting, the CoinDesk 20 Index was up approximately 0.7% over the last 24 hours, while the CoinDesk 80 Index increased by 0.4%.
Analysts remain hopeful about BTC’s long-term outlook.
“Donald Trump’s endorsement of including crypto assets in 401(k)s provides additional structural support, although its impact on the market will take time,” stated Jag Kooner, head of derivatives at Bitfinex. “Ultimately, this will gradually shift investments from speculative to strategic, pension-style allocations, further integrating crypto into the U.S. capital markets.”
Derivatives Positioning
- The increase in BTC and ETH futures open interest has plateaued at over 700K BTC and 14.2 million ETH, aligning with the sideways trading in spot prices ahead of the central bankers’ conference in Jackson Hole.
- Open interest in LINK futures remains near all-time highs, with the token price reaching nearly $27 on Wednesday, the highest since January. Other major tokens, excluding BNB, have seen a decrease in open interest in the past 24 hours.
- HYPE is at the forefront among crypto majors, boasting annualized funding rates exceeding 25%, indicating a rising demand for bullish exposure in the token.
- On CME, the recovery observed in BTC futures on Wednesday has stalled, with the three-month premium dropping to nearly 7%. Meanwhile, open interest in ether futures continues to grow, approaching the 2 million ETH mark. These contrasting trends suggest a growing institutional preference for ether over bitcoin.
- On Deribit, the 180-day bitcoin options skew has declined to -0.42, indicating a heightened demand for put options, or downside protection, since June 2023. Conversely, longer-dated ETH options continue to favor calls.
- Transactions on the OTC network Paradigm revealed demand for BTC puts financed through the sale of calls, along with varied activity in the ether options market.
- Volmex’s seven-day implied volatility indices for bitcoin and ether have remained stable at approximately 36% and 70%, respectively, suggesting that the market does not expect a significant volatility surge related to the Jackson Hole event.
Token Talk
- YZY Money, a Solana memecoin associated with Ye (formerly Kanye West), launched Thursday with a staggering 6,800% price surge before dropping below $1, reflecting the speculative nature surrounding celebrity tokens.
- The token announcement on Ye’s X account raised suspicions of a hack until he posted a video seemingly confirming the launch. Speculation remains about whether the video was AI-generated.
- The token’s distribution is similar to that of the TRUMP coin: 70% of the supply assigned to Ye, 10% to liquidity, and 20% for sale. Insiders reported Ye initially sought 80% before settling for 70%.
- Wallet analysis indicates preemptive access. Wallet 6MNWV8 utilized 450,611 USDC at $0.35, later liquidating part of its holdings for $1.39 million, netting a $1.5 million profit once price increases on remaining assets are factored in. Another whale invested $2.28 million and is now sitting on $6 million in profits.
- Liquidity was exclusively provided via YZY, allowing developers or large investors to withdraw value at their discretion—a design critics compare to Argentina’s contentious LIBRA token.
- Retail investors bore the brunt of losses: one wallet lost nearly $500,000 within two hours after purchasing at $1.56 and exiting at $1.06. This incident underscores how insider-heavy allocations and liquidity schemes can disadvantage fans and traders, even as hype briefly drove the token’s market cap to nearly $3 billion.
- Wormhole has countered LayerZero’s $110 million offer for Stargate with intentions to make a higher bid, requesting the community to postpone its governance vote by five days to allow for thorough evaluation of both offers.
- The appeal of Stargate lies in its scale: $4 billion processed in July, $345 million locked, and a treasury holding $92 million in stablecoins and ether, along with $55 million in STG and other assets.
- LayerZero’s proposal would reallocate treasury and future revenues to itself, which critics argue undervalues Stargate and undercuts token holders.
- Wormhole contends that STG holders “deserve a more competitive process” and frames its bid as one that promises greater long-term value.
- A merger would blend Stargate’s unified liquidity pools with Wormhole’s integrations across various blockchains, potentially creating one of the largest cross-chain hubs.
- The Wormhole Foundation asserts that such a partnership would “unlock unrealized value” and generate both immediate and lasting advantages for STG and Wormhole token holders.
