Cryptocurrency markets experience low-liquidity sell-off over weekend, fueling Bitcoin gains As low as $74,674 and Ethereum to $2,164, though both have found support not seen since April-June last year and are currently up about 1% since midnight UTC.
Cryptocurrencies have lost $290 billion in market value since Saturday, as losses intensified over the weekend.
U.S. stock markets were lower before the bell as risk assets fell across the board, with S&P 500 futures down 0.58% and Nasdaq 100 futures down 0.85%.
Gold and silver have cooled off after hitting record highs last week, each down about 3.5% since midnight.
“The silver bubble really burst on Friday after lenders raised margin requirements for speculators,” Derren Nathan, head of equity research at Hargreaves Lansdown, wrote in a note Monday morning. “This comes after Donald Trump nominated Kevin Warsh, one of the more hawkish contenders in the race, to be chairman of the Federal Reserve.”
Derivatives Positioning
- Market-wide futures open interest (OI) has fallen to $108.94 billion, the lowest level since April, signaling growing aversion to leveraged bets. The figure peaked at $223 billion in October.
- More than $800 million worth of leveraged trades were forced to be liquidated by exchanges within 24 hours. Most of these are bullish long strategies.
- OI for BTC and ETH futures fell by more than 1% and 3% respectively. Several tokens such as SOL, DOGE, SUI, ADA, and LINK saw an increase in OI, possibly due to traders shorting the dip.
- ZEC, WLFI, TON, BCH, and XLM markets experienced net buying pressure, as indicated by positive cumulative volume delta (CVD) values. Other major currencies, including Bitcoin and Ethereum, recorded negative CVD readings.
- CME Bitcoin futures opened lower at $77,730 from Friday’s closing price of $84,105, following a decline in spot prices over the weekend. The market often fills gaps, which means the price could bounce back above $80,000.
- On Deribit, a $75,000 put option is now as popular as a $100,000 bet. Other puts with strike prices of $80,000 and $70,000 also showed large increases in open interest. Together they point to downside concerns.
- The block flow was characterized by demand for Ethereum put options, with the butterfly strategy designed to profit from a wide range of trades. After the recent drubbing, traders appear to be expecting a consolidation. In Bitcoin, traders are chasing put option spreads.
token talk
- The altcoin market was not immune to the weekend’s risk-off sentiment, with low liquidity conditions triggering a wave of liquidations, with more than $300 million worth of Ethereum positions being forcibly liquidated in the past 24 hours.
- Privacy Coin Dash Its value has shrunk by 25% in the past week, while optimism among native blockchain tokens , Ether and al fell more than 20% during the same period.
- One notable anomaly is HyperLiquid’s HYPE, which is up more than 40% over the past week and is up 13% from Saturday’s low of $27.5.
- Hype climbed last week following a surge in precious metals market volumes, giving traditional financial traders another use case for cryptocurrencies.
- Jupiter’s JUP token has been one of the best performers since midnight UTC, rising 7.9% after falling nearly 25% over the weekend.
- Low-liquidity altcoin markets are often considered to lack market depth, meaning larger moves in both directions tend to be exaggerated as the remaining orders on the order book fail to satisfy immediate buyer and seller demand.
