Cryptocurrency markets continued to show weakness on Tuesday morning, following a sell-off in technology stocks on the U.S. stock market and a correction in precious metals prices.
Bitcoin was trading at $68,000, down 1.25% since midnight UTC, while Nasdaq futures and gold were down 0.55% and 2.4% respectively during the same period.
Altcoins also fell, with popular memecoins PEPE, DOGE and TRUMP leading the decline, falling between 3.5% and 4.5%.
Concerns about artificial intelligence and its potential to disrupt multiple industries have fueled a sell-off in technology stocks. Bitcoin has been closely correlated with the Nasdaq since February 3, with the correlation coefficient indicator rising from negative 0.68 to positive 0.72 over the past two weeks.
Meanwhile, gold failed to establish support above $5,000 and is currently trading at $4,928. On January 28, the precious metal hit an all-time high of $5,600, followed by a historic 21.5% correction over the next four days.
Derivatives positioning
- Cryptocurrency futures continue to see capital outflows. Within 24 hours, industry-wide cumulative notional open interest fell 1.5% to $93 billion, a multi-month low.
- $229 billion worth of leveraged bets were liquidated by exchanges within 24 hours, with longs (bullish trades) accounting for the majority.
- Open interest in DOGE futures fell 4%, ahead of trends in most major currencies. Open interest in PEPE, LINK and AVAX fell between 3% and 5%.
- Futures open interest related to HYPE, which has outperformed recently, has cooled to 44.45 million HYPE contracts, the lowest level since early December. This may reflect profit-taking after the coin outperformed Bitcoin and other major currencies during the recent crash.
- Market panic has receded, as evidenced by the sharp pullbacks in Bitcoin and Ethereum’s Implied Volatility Index from their monthly highs.
- On Deribit, Bitcoin and Ethereum puts continue to trade at a premium to calls, suggesting lingering downside concerns, but positions are as defensive now as they were two weeks ago.
token talk
- Altcoins continue to track Bitcoin since September, with the “Bitcoin Dominance” indicator currently ranging between 57.4% and 60.1%.
- In the past 7 days, AI token MORPHO has risen by 23.5%, while privacy coin zcash Growth of 19% over the same period.
- Conversely, Layer 1 blockchain token Layer 0 (ZRO) has fallen 16% over the past week, continuing to lose momentum following the announcement of a partnership with Citadel Securities and DTCC.
- Relative weakness among several altcoins continues on shorter time frames, with HYPE, SUI and ASTER all down between 3% and 4.8% since midnight UTC as the cryptocurrency market awaits bullish catalysts.