Cryptocurrency markets open the week under pressure, with Bitcoin extending losses after weekend volatility Showing early signs of stabilizing below $70,000.
While the largest cryptocurrency has fallen more than 2.8% in the past 24 hours, it remains well below recent lows around $60,000. Still, the stock struggled to regain momentum after last week’s sharp decline reignited debate over whether the market has entered a deeper bear market or is nearing a bottom.
Bitcoin bulls point to the slowdown in Bitcoin’s downward trend as a sign of exhaustion, despite the victory for critics. Still, software stocks are in the spotlight, and some are starting to rebound as fears of a more severe collapse ease.
The CoinDesk 5 Index (CD5) fell 3.4%, with all five of the largest cryptocurrencies falling. ether Bitcoin price fell around 5%, underperforming, but remained above psychological support at $2,000 as traders reduced risk on the major coin. The broader CoinDesk 20 (CD20) index fell 3.7%.
Derivatives positions
- Bitcoin futures took a clear bearish turn last week as open interest (OI) slid from $19 billion to $16 billion, marking a period of continued deleveraging.
- Funding rates for Bybit (-2.24%) and Binance (-0.5%) have turned from neutral to negative, indicating that short sellers are now leading the narrative. Institutional demand has cooled as the three-month basis compressed to 3%, reflecting a broader derivatives landscape dominated by risk aversion.
- Options data confirms this defensive shift, with BTC’s one-week 25 delta bias rising to 20% and call option dominance falling to 48%.
- The implied volatility (IV) term structure is currently in extreme backwardation, with front-end volatility at 85.03%, far exceeding long-term expectations (~50%). That’s a huge premium for immediate protection against recent price drops.
- Coinglass data shows that the 24-hour liquidation amount was $397 million, and the ratio of longs and shorts was 45:55. BTC ($234 million), ETH ($74 million), and SOL ($14 million) lead the way in nominal liquidations.
- The Binance liquidation heat map shows $68,160 as the core liquidation level to monitor if the price falls.
token talk
- Crypto wallet Rainbow first launched the RNBW token last week, but the launch didn’t go smoothly.
- The Ethereum-based project launched the token on the layer 2 network Base, with the price plummeting to $0.025, down 75% from its $0.10 initial coin offering (ICO) two months ago. It has since risen to $0.031
- The drop eliminated speculators’ bets on a fully diluted valuation (FDV) of $100 million. On Polymarket, the odds on this bet reached a high of nearly 80% earlier this year. FDV is currently hovering around $31 million.
- At the heart of the confusion is a delay in the distribution of tokens to early buyers and participants of the Rainbow on-chain rewards program. Some users said they had not received their airdropped tokens hours after launch.
- Rainbow co-founder Mike Demarais blames it on back-end infrastructure collapsing from demand. Under vesting terms, U.S. investors won’t be able to fully access their tokens until December 2026.
- Rainbow raised $18 million in a 2022 Series A round led by Reddit co-founder Alexis Ohanian’s company 776. The wallet is known for its gamification features and points system tied to the RNBW token.
