coindesk.com
Bitcoin BTC$91,989.20 rose above $92,000 on Tuesday, with the move being backed by a 25% increase in daily trading volume to $37 billion.
The next major test for the largest cryptocurrency is $94,500, a price that has provided three successive rejections on Jan. 6, Dec. 10 and Dec. 3.
A breakout above that resistance level would signal a move toward $100,000 for the first time since November and a trend reversal from a corrective phase stretching back to early October, which has been characterized by a series of lower highs and lower lows.
The altcoin market is also starting to heat up, with privacy-focused DASH surging by as much as 63%, the most in five years, after a breakout at around 03:00 UTC, with the move liquidating $1.3 million worth of short positions, according to CoinGlass.
While on the surface, the crypto market lacks catalysts in 2026, political and economic turmoil in nations like Venezuela and Iran could spur a new wave of demand for assets outside of the traditional finance ecosystem.
Derivatives positioning
- Crypto exchanges have liquidated leveraged futures bets worth $180 million in 24 hours, with both bullish and bearish positions taking a hit. The tally is significantly lower than those seen in recent days and indicates a choppy trading environment.
- BTC and ether ETH$3,131.17 30-day implied volatility indexes remain under pressure as traders bet on near-term calm.
- Open interest (OI) in BTC and ETH futures has held largely flat. Traders seem unwilling to commit capital ahead of the U.S. inflation report due later Tuesday.
- LTC$76.22 stands out with an OI surge of over 20%. The token's price dropped to the lowest since Dec. 24, extending a three-day losing streak. An increase in OI alongside a drop in price is said to valid the downtrend.
- Positioning in the CME-listed bitcoin and ether futures remains light with basis (the futures premium) steady a little below 5%, just 80 basis points more than the yeild on the U.S. 10-year Treasury. That barely visible premium indicates the dwindling appeal of BTC and ETH cash and carry arbitrage plays that once offered yields in excess of 20%.
- On Deribit, BTC and ETH puts continue to trade at a premium to calls, reflecting downside bias.
- Block flows featured demand for BTC calls at strikes $98,000 and $100,000 and demand for ether call spreads or bullish bets.
Token talk
- Privacy coin DASH led a rally in altcoins, surging more than 60%, the most since February 2021, to reach its highest level since Nov. 27, seemingly unperturbed by restrictive rules imposed on the tokens by the United Arab Emirates on Monday.
- Monero XMR$645.04 also demonstrated the strength of the privacy coin sector, jumping by more than 8% since 23:00 UTC, outperforming the wider altcoin market.
- Traders are clearly focusing on the altcoin market as opposed to bitcoin and majors this week, exhibited by the CoinDesk 80 Index (CD80) day-to-date rise of 2.44% compared with CoinDesk 20 Index's (CD20) tally of 1.33%.
- The CD80 is comprised of highly liquid altcoins, while 70% of the CD20 Index is weighted by bitcoin, XRP and ether.
- Memecoins continue to make a comeback after a 10-month lull last year. Trading volume on Solana-based token issuer Pump.fun for January has already reached December's total just 13 days into the month, setting a daily record high along the way, according to DefiLlama.
- Newly issued tokens continue to suffer despite broader strength; derivatives exchange Lighter's LIT token is now 50% down from its debut on Dec. 23 after tumbling 9.5% in the past 24 hours, while Cardano's NIGHT token is down by 44% from its record high on Dec. 22.