The cryptocurrency market experienced fluctuations around crucial support and resistance levels on Wednesday, with bitcoin trading at $107,800 and ether at $3,830, showing indecision among traders and holders.
A drop in bitcoin price below $102,000 would signal the continuation of a bearish trend, likely accelerating a decline to at least $98,400, which would severely impact the altcoin market due to lower liquidity.
Conversely, if bitcoin can recover to approximately $120,000, it would suggest a reversal from the short-term downtrend and potentially lead to new record highs.
Derivatives Positioning
By Omkar Godbole
- futures open interest (OI) surged 22% to $303 million in the past 24 hours, driving growth in a few major coins such as ENA, BCH, HYPE, ADA, AVAX and BTC.
- Futures linked to LINK, XPL, and PUMP saw capital outflows, reflecting increased investor risk aversion amid market volatility.
- Annualized perpetual funding rates for many major cryptocurrencies, including BTC and ETH, remain near zero, indicating a balanced derivatives market.
- BTC’s order book heat map displayed a cluster of sell orders near $111K in the Binance-listed BTC/USDT perpetual.
- On the CME, OI in ether futures reached a record 2.43 million ETH, while options OI remained steady near the all-time high of 297K ETH. In contrast, BTC’s futures OI lingered at around 142K, significantly below last year’s peak of over 200K. This divergence indicates a preference among institutional investors for ETH over BTC.
- On Deribit, flows included short strangles and call overwriting strategies in BTC, alongside some demand for puts as protection against further declines. For ETH, the strategies focused on near-term put spreads and calendar spreads, per Wintermute.
- In BTC’s market, puts traded at a premium to calls across all tenors. Nonetheless, TH options displayed bullish sentiments past the December expiry.
Token Talk
By Oliver Knight
- continued its rise on Wednesday, leading the otherwise weak altcoin market with a 9.2% increase in 24 hours.
- The privacy token has surged an impressive 461% over the past month and continues to reach new heights.
- The driving force behind ZEC’s ascent is heightened enthusiasm for shielded tokens, which currently represent 27.5% of the total supply.
- Shielding serves as a privacy method that conceals transactions. Holders of shielded tokens must keep them in non-custodial wallets, meaning they are not held on exchanges.
- With a substantial portion of the supply retained in private wallets, the theory is that the sellable supply is limited.
- Combining a supply reduction with rising demand has led to a persistent upward rally, outperforming nearly all cryptocurrencies available.
- ZEC’s gains represent a rare sign of optimism amidst a period where several other tokens have fallen to multi-month lows.
- ASTER, often highlighted in September, dipped below $1.00 on Tuesday, marking a total decline of 33% over the past week.
- Recently issued plasma tokens have also appeared on the sell-side of order books, as demand and excitement quickly waned, resulting in a 25% drop in the past week.
