Crypto Markets Today: Bitcoin tests key resistance as memecoin trading volume explodes

Bitcoin $BTC$93,782.35 retreated from Monday's peak, when it touched the highest price since mid-November. That's the same level the largest cryptocurrency neared, and failed to breach, in early December.

While some traders will be shorting that level as a sign of resistance, others will be eyeing a potential break out that could lead to a run towards $98,900 — a key level of support between June and November.

Altcoins rallied, with $SUI adding more than 3% since midnight UTC to add to a 24 hour rally of 16%, while $XRP continued its barnstorming start to the year with a 29% move to the upside since Jan. 1.

There has also been notable activity in the memecoin sector, with trading volumes on Solana-based token issuer Pump.fun hitting a record high of $1.27 billion, indicating activity from retail traders. The CoinDesk Memecoin Index (CDMEME) rose 1.5% to take its year-to-date gain to 19%.

Derivatives positioning

• Crypto futures bets worth over $400 million have been liquidated in the past 24 hours. As of Monday, most of these were shorts, a sign that traders entered the New Year expecting a price slide.
• $BTC global futures open interest (OI) has held flat at around 660K $BTC over 24 hours while OI in $XRP jumped to 2 billion $XRP, the highest since Oct. 11. The increase indicates capital inflows into the $XRP market as the token's price hit multiweek highs.
• Funding rates for most major cryptocurrencies remain moderately positive, indicating a bullish bias. Tokens such as SOL, TRX, ZEC, SHIB and UNI stand out with negative rates, indicating a build up of bearish short positions.
• Volmex's BVIV index, which represents the annualized 30-day implied volatility in $BTC, reversed Monday's small spike from 44% to 47%, signaling continued calm.
• On Deribit, put bias in $BTC and $ETH continued to ease as traders chased upside via calls.
• Block flows featured $BTC and $ETH call spreads and $BTC strangles.

Token talk

• Memecoins are back on the map after a difficult year that culminated in drawdowns of more than 95% across the board. The renewed optimism comes as daily trading volume on Pump.fun, the Solana-based token generator, hit a record high of $1.27 billion on Monday.
• There has also been activity on BNB Chain as retail traders flock to predominately Chinese-language tokens that fall under the "Four Meme" umbrella, a phrase coined by Binance founder Changpeng Zhao.
• Aside from the memes, Sui's native token, $SUI$1.9794, enjoyed some upside, rising by 3% since midnight and 16% over the past 24 hours after Mysten Labs, the developers behind Sui, published a research paper on private crypto transactions, leading the community to speculating over whether Sui will add privacy features to its blockchain.
• CoinMarketCap's "altcoin season" indicator is at 27/100, still firmly in "bitcoin season" territory, but a far cry from December's low of 14/100, demonstrating early signs of strength across the sector.
• There are warning signs, however, with the average crypto relative strength index (RSI) flashing "overbought" to suggest that several altcoins may face a period of profit-taking in the short term.