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The crypto market is facing one of its most severe tests, with bitcoin the price broke below the crucial $98,000 support level after a wave of selling pressure in a low liquidity environment.
The sell-off prompted more than $1.1 billion in liquidations, about half of which occurred in bitcoin trading pairs, according to CoinGlass.
The altcoin sector fared worse, along with ether fell by 9% in 24 hours while a number of altcoins were treated double-digit movements to the side. The CoinDesk 20 Index slipped 8% even with the best performance, losing 3%.
Crypto’s fall coincides with a stock sell-off. Nasdaq futures (NQ) have lost 2.95% of their value in the last 24 hours.
Derivatives positioning
By Omkar Godbole
- Bitcoin’s 30-day implied volatility index, BVIV, which peaked at 50% annualized, during Asian time, fell to 47.8% even as the spot price remained close to daily lows of around $97,000.
- This suggests that, despite the recent sell-off, there is no panic buying of options, indicating a more measured market response.
- Ether’s volatility indices paint a similar picture.
- Open interest (OI) in futures linked to BTC remains flat while OI in ETH, SOL, XRP, SUI, ADA, LINK, UNI and most other tokens has decreased by more than 5% in a sign of capital flows.
- On the CME, the ether futures premium fell to 4.26%, the lowest since April, while BTC remained relatively high above 5%. It is a sign of reduced demand for ETH relative to BTC, even though the ETH price has risen against BTC.
- The market swoon boosted demand for BTC and ETH put on Deribit. Block flows in BTC presented put spreads and risk reversals. In the case of ETH, put spreads and put the calendar diagonal spreads dominated the flows.
Token talk
By Oliver Knight
- The altcoin market was decimated by a low liquidity sell-off on Friday as was ether slid more than 9% in 24 hours and tokens including aave , and lost more than 10%.
- More than $1.1 billion of derivative positions were liquidated during the same period, $510 million of which was attributed to bitcoin, according to CoinGlass.
- Several altcoins have now fallen to multi-month lows. Aave is now trading at its lowest point since May and ETH at its lowest since July.
- The altcoin market will depend on whether bitcoin, the anchor of the market, can claw its way out of danger and back above the $98,000 support level.
- The failure to do so will confirm a tendency to the trend and the potential reversal of the bear market from the maximum of October of $ 126,000.
- There was a glimmer of hope for altcoins: the privacy coin sector. Zcash and monero they were both in the green on Friday as they defied market pressure.
- ZEC is now up more than 1,000% since August as investors go full circle, back to the narrative that is centered on libertarian politics over speculative gains.
