Bitcoin although it’s slightly greenish, which can be shocking. The largest cryptocurrency has gained less than 0.5% since midnight UTC, with the strong move towards $80,000 likely to encounter resistance.
Luke Deans, a senior researcher at Bitwise, told CoinDesk that this is because short-term holders’ cost basis is centered around that price. The move above could convince them to take profits and sell, thus limiting any upside.
Another headwind could be US personal consumption expenditures (PCE) inflation in March, with oil prices continuing to weigh on risk assets. West Texas Intermediate crude oil has soared to $110, with reduced shipping volumes in the Strait of Hormuz leaving energy markets vulnerable.
The Federal Reserve’s decision to keep the federal funds rate steady on Wednesday also weighed on markets. Specifically, there were as many as four dissenters, the most since 1992, with one governor pushing for a rate cut and three regional chairs opposing the statement’s suggestion that the Fed resume its easing policy.
Deans also said that altcoins remain pegged to Bitcoin, with 180-day correlation and beta percentiles approaching 97% and 99%. This means the coin could potentially move like leveraged Bitcoin trading does today.
“Below the surface, conditions typically associated with rising volatility appear to be building,” Deans said. “Liquidity remains subdued, with profits and losses largely offsetting each other, reflecting a lack of directional conviction.”
In these environments, price changes are often needed to unlock new liquidity, he said.
Derivatives positioning
- Futures open interest (OI) across the market fell more than 2% in 24 hours to $119 billion. However, transaction volume increased by 26% to $208 billion. This combination indicates that positions are being unwound and money is fleeing the market, a sign of risk aversion.
- More than $500 million in leveraged bets, mostly long or bullish positions, have been liquidated on exchanges. Market weakness from rising bond yields clearly caught bulls off guard.
- Bitcoin futures’ OI fell 2%, and Ethereum’s OI fell 1.7%. Most major currencies posted similar losses, with the exception of DOGE, whose OI is still hovering at six-month highs.
- With the exception of XMR, XLM, TRX, and CC, most tokens, including the two largest tokens, had sellers bid more than buyers raised, resulting in a negative 24-hour cumulative volume delta. Simply put, sellers are becoming more aggressive, which suggests further price declines are likely.
- Bitcoin’s 30-day implied volatility index, BVIV, has fallen to 41%, extending its decline from February’s high of 97%. Currently, the index is at its lowest level since January 29. This again illustrates that markets have become less sensitive to adverse macro developments such as rising bond yields and higher oil prices. Ethereum’s Volatility Index shows a similar pattern.
- On Deribit, BTC and ETH protective puts remain relatively expensive relative to calls. The large concentration of open interest in Bitcoin’s $80,000 call options creates a long-term (positive) gamma dynamic, which suggests that market makers may be selling on the dip to or above this level to hedge book risk. This could slow potential gains.
- Bitcoin’s options term structure shows less near-term stress, with traders pricing future rather than near-term uncertainty.
- According to Amberdata data, the block flow is characterized by wide BTC put spreads involving strike prices of $72,000 and $65,000. This strategy shows expectations that the price will drop again to $65,000 or lower.
token talk
- Memecoin launchpad Pump.fun is adding a way for creators to send fees to charity as its PUMP token trades at a lower price following a major change in its earnings policy.
- The feature is called Charity Coins, and coin administrators can select verified charities in Pump.fun’s creator fee settings. Support over 10,000 charities using its platform Donate.gg.
- The goal is to reduce disputes between traders and token administrators as tokens form around charitable causes. The platform’s current primary fundraising amount is $12,800 for St. Jude Children’s Research Hospital.
- Pump.fun also stated that it will stop using all revenue to purchase and destroy PUMP. Instead, it will now put 50% of future net revenue into automatic buyback and destruction for one year, while retaining the remainder for recruiting, product work, marketing, and possible deals.
- These changes come at a difficult time for PUMP. The coin is down more than 7% in the past 24 hours, while the broader CoinDesk 20 (CD20) index is down 2.2%.
