Cryptocurrency markets are on the brink of a major Bitcoin breakthrough Trading at $78,000, it failed to break above that level on Friday and has not done so since January.
According to CoinGlass’ liquidation heat map, a break above this level would spark upward momentum towards $80,000 as $180 million worth of futures positions would be liquidated between $77,000 and $78,000.
However, if the price fails to rise and falls back below $77,300, a further $71 million long position will be liquidated, creating a defensive trading environment for both parties.
Markets were higher after U.S. President Donald Trump extended a ceasefire in Iran and called the country’s government “deeply divided.”
Following the news, Nasdaq 100 futures and S&P 500 futures were up 0.77% and 0.6%, respectively, since midnight UTC, indicating an improvement in broader market sentiment.
Derivatives Positioning
- BTC’s breakthrough of $78,000 caught short sellers off guard, causing market-wide short liquidation on derivatives exchanges to reach $286 million. Long or bullish trades suffered only $132 million in liquidations.
- Nonetheless, overall cryptocurrency futures open interest (OI) increased by more than 4% in 24 hours to $126 billion. Notably, major tokens including Bitcoin and Ethereum (ETH) have seen OI growth, outpacing spot price gains, indicating renewed capital inflows and rising demand for leverage.
- Funding rates have turned positive for most coins, including Bitcoin, indicating a renewed bias in bullish bets. The 24-hour cumulative volume delta paints the same picture.
- M token stands out with an annualized financing rate of over 200%, indicating that the market is overheated and full of bullish bets. Meanwhile, HYPE and XML markets are showing a bearish short bias.
- Broadly speaking, cryptocurrency futures activity suggests that the market has further room to rise. Bullish sentiment was also supported by the 30-day Implied Volatility Index for Bitcoin and Ethereum, which remained under pressure, indicating calmness in the market.
- On Deribit, Bitcoin and Ethereum risk reversals continue to show negative values across all time frames. This demonstrates the abundance of protective puts relative to calls.
- The big flow is characterized by investor preference for call option spreads, a strategy used by traders to profit from moderately bullish, sideways or slightly rising markets. Traders are also chasing Bitcoin and Ethereum straddles, a volatility strategy.
token talk
- The altcoin market was also active on Wednesday, with all major CoinDesk indexes up at least 1.5% since midnight UTC.
- The CoinDesk MemeCoin Index (CDMEME) was the best performer, rising 3.4%, as someone converted $575 into more than $1 million on the recently released token ASTEROID.
- Popular meme coins TRUMP and DOGE rose 6% and 3.8% respectively, reflecting broader optimism across the industry.
- Privacy coins DASH and XMR were also up, with both up 6%-7% in the past 24 hours, but retreating slightly since midnight.
- CoinDesk’s overnight interest rate (CDOR) on USDC rose to its highest level since 2024, reaching 15%. CDOR measures stablecoin lending activity on the Aave platform, which surged following the $290 million attack on KelpDAO over the weekend. High interest rates reflect high demand.