coindesk.com
The crypto market is facing one of its sternest tests yet, with the bitcoin $BTC$96,453.17 price breaking below the crucial $98,000 level of support following a wave of sell pressure in a low-liquidity environment.
The sell-off prompted more than $1.1 billion in liquidations, about half of which occurred on bitcoin trading pairs, according to CoinGlass.
The altcoin sector performed worse, with ether $ETH$3,151.92 dropping by 9% in 24 hours while a number of altcoins were dealt double-digit moves to the downside. The CoinDesk 20 Index slid 8% with even the best performing, LTC$96.07, losing 3%.
Crypto's plunge coincided with a sell-off in equities. Nasdaq futures (NQ) lost 2.95% of their value over the past 24 hours.
Derivatives positioning
By Omkar Godbole
- Bitcoin's 30-day implied volatility index, BVIV, which spiked to annualized 50%, during the Asian hours, has fallen back to 47.8% even though the spot price remains near daily lows of around $97,000.
- This suggests that despite the recent sell-off, there is no panic buying of options, indicating a more measured market response.
- Ether's volatility indexes paint a similar picture.
- Open interest (OI) in futures tied to $BTC remains flat while OI in $ETH, SOL, XRP, $SUI, ADA, LINK, UNI and most other tokens has declined by over 5% in a sign of capital outflows.
- On the CME, ether futures' premium has dropped to 4.26%, the lowest since April, while $BTC remains relatively elevated above 5%. It's a sign of reduced demand for $ETH relative to $BTC, even though the $ETH price has risen against $BTC.
- The market swoon boosted demand for $BTC and $ETH puts on Deribit. Block flows in $BTC featured put spreads and risk reversals. In $ETH's case, put spreads and put diagonal calendar spreads dominated flows.
Token talk
By Oliver Knight
- The altcoin market was decimated by a low liquidity sell-off on Friday as ether $ETH$3,151.92 slid more than 9% in 24 hours and tokens including aave AAVE$183.34, JUP$0.2929 and $SUI$1.7963 lost more than 10%.
- More than $1.1 billion worth of derivatives positions were liquidated during the same period, $510 million of which was attributed to bitcoin, according to CoinGlass.
- Several altcoins have now fallen to multi-month lows. Aave is now trading at its lowest point since May and $ETH at the lowest since July.
- The altcoin market will be depending on whether bitcoin, the market's anchor, can wrangle its way out of danger and back above the $98,000 level of support.
- Failure to do so would confirm a downtrend and potential bear market reversal from October's high of $126,000.
- There was one glimmer of hope for altcoins: the privacy coin sector. Zcash $ZEC$530.61 and monero XMR$388.39 were both in the green on Friday as they defied market pressure.
- $ZEC is now up by more than 1,000% since August as investors go full circle, back to a narrative that is centered on libertarian politics over speculative gains.
