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The crypto market continued to establish fresh support levels on Thursday, along with bitcoin trading around $103,000 while ether rose less than 1% to $3,500.
The average crypto relative strength index (RSI) remains in neutral territory while the Index of fear and greed print 25/100, which indicates a negative sentiment in the market.
There has been a bit more action in the altcoin market. AERO fell 18% in the last 24 hours after an announcement of a merger with Velodrome, while STRK and FET also made double-digit moves on the side.
XRP led gains among the largest cryptocurrencies, rising by 3.5% after a flurry of activity on the options market.
The market needs a catalyst before confirming a potential downward trend from the October record high, or a potential funding around $98,000. The dollar remains relatively strong at around 99.8; a break above 100 puts pressure on risk assets like the crypto sector.
Derivatives positioning
By Omkar Godbole
- Despite the news of the reopening of the US government, BTC and ETH 30-day implied volatility indices from Volmex remain in their recent high ranges, highlighting persistent structural issues that continue to keep volatility expectations high.
- Futures markets continued to shed risk. Bitcoin open interest (OI) fell 3.58% to $66.14 billion, with total liquidations of $186.47 million. Most of these were long traders who bet on a price rally.
- OI in SOL, HYPE and DOGE also decreased, while ZEC futures saw capital flows, raising OI by 4%.
- On the CME, the three-month annualized premium in ether futures slipped below 6%, representing a discount to the BTC premium for the first time in weeks. This does not necessarily imply relative bearishness in the ether, it could reflect an increased cash and bring arbitrage in the second largest crypto.
- On Deribit, strangles accounted for 27% of the total flow of BTC block options in the last 24 hours. It is a sign of growing prejudice for non-directional strategies that bet on the degree of price volatility. This was the case during the past week.
- In the case of ETH, put diagonal schedule and call schedule are two of the most popular strategies.
- In general, BTC and ETH options continue to show a bias for the powers that be, offering downside protection, in the near term.
Token talk
By Oliver Knight
- The altcoin market continued to consolidate on Thursday after what turned out to be an extended period of low volatility price action.
- CoinGlass data shows that open interest in all crypto markets fell by 1.13% to $142 billion, while the 24-hour volume increased by 25% to $328 billion, demonstrating a preference for spot trading over derivatives.
- Ether exchanged little changed, while tokens including solana bnb and all are in the red by between 0.2% and 1.8%.
- AERO, the token linked to the decentralized exchange (DEX) of Base, Aerodrome, lost 18.2% after the rally on Wednesday.
- Relative volatility can be linked to a announcement that the company will upgrade its protocol infrastructure to support EVM-compatible extensions, integrating with Circle Internet’s Arc blockchain and wider “MetaDEX” hubs, expanding its ecosystem’s reach and capacity.
- Aerodrome also said it will merge with Velodrome, becoming a protocol with a unified token. AERO holders will receive 94.5% of the new token and VELO holders 5.5%.
- and the FET token also posted strong declines – 13.8% and 11%, respectively – although both remained considerably higher during the week.
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