Bitcoin Bitcoin is struggling to regain ground above $70,000 as altcoins outperform the market.
The largest cryptocurrency was little changed over 24 hours, while the broader CoinDesk 20 (CD20) index rose 0.40%, although Ethereum refused. Memecoin led the gains, with the CoinDesk Memecoin Index (CDMEME) rising 1.5% and PIPPIN rising 46%.
Tokens related to artificial intelligence (AI) are also performing well. The token co-founded by OpenAI CEO Sam Altman is up more than 3% in the past day, while Virtuals’ VIRTUAL token is up 2.4%. This is “agent AI,” AI tools can now perform tasks, and narratives are growing.
Still, the Crypto Fear and Greed Index points to “extreme fear” in the market following last week’s sell-off.
Meanwhile, traditional markets stabilized, in part due to Prime Minister Sanae Takaichi’s landslide victory in Japan’s general election. Although Japanese bond yields rose after the results were announced, they have since fallen to near pre-election levels. This reduces the risk that trillions of dollars invested overseas will flow back to Japan in search of higher yields.
Derivatives positions
- Bearish momentum in Bitcoin futures is building as open interest (OI) continues to fall to $15.9/minute, signaling a deep and prolonged phase of deleveraging.
- This shift is most evident in the funding rates of Binance (-7%) and Bybit (-8%), which have fallen into deeply negative territory. This suggests that short sellers are paying a high premium to maintain their dominance. Institutional interest remains on the sidelines as the three-month basis stalls at 3%.
- The Bitcoin options market showed a cooling of extreme defensive sentiment. One-week 25-delta skewness is 16%, while call option dominance has rebounded to 56%, indicating that the market is turning to bargain hunting.
- The implied volatility (IV) term structure is moving away from extreme backwardation and toward mixed positions, suggesting that while short-term protection remains expensive, longer-term volatility expectations are stabilizing.
- Coinglass data shows that the 24-hour liquidation amount was $290 million, and the ratio of longs to shorts was 53:47. BTC ($114 million), ETH ($89 million), and other coins ($16 million) lead the way in nominal liquidations. Binance’s liquidation heat map shows that the core liquidation level to monitor in case of price decline is $68,160.
token talk
- Merkle Trade, the largest perpetual futures decentralized exchange on the Aptos blockchain, is in the throes of closure. The exchange disabled new trading positions on Friday and will force-close all open positions today.
- Merkle’s native token, MKL, is up 9% in the past 24 hours. It remains redeemable without withdrawal fees, and the final staking reward payout is scheduled for February 12th. The coin has lost 77% in the past 12 months.
- Less than two years ago, Merkle raised $2.1 million in a seed round from Aptos Labs, Hashed and Arrington Capital.
- Despite processing $30 billion in transaction volume since its debut in 2023, the team gave no clear reason for the closure in a post on X last week, noting only that the decision came after “careful consideration.”
