"If we look at a similar phase of the market cycle, a similarly intense sell-off in May 2022 ended with price consolidation around one level for a month, followed by a deeper dive," he added.
Bitget's chief market analyst said derivatives selling and leveraged positioning amplified declines across the board, compressing price action. Macro and sentiment headwinds, including risk-off reactions to geopolitical and interest-rate uncertainty, have reduced appetite for higher-beta assets like $XRP, he said
In traditional markets, oil price volatility remained elevated, pricing in a potential escalation in U.S.-Iran tensions. A spike in oil could add to inflationary impulse worldwide, further complicating matters for the crypto bulls.
Derivatives positioning
- The crypto futures market continued to see capital outflows as cumulative notional open interest fell to $103 billion and leveraged positions faced forced closures due to margin shortages.
- Over $800 million in leveraged bets was liquidated by centralized exchanges in the past 24 hours and the tally may rise significantly given $BTC just dropped below the pivotal support of $70,000.
- Despite liquidations, 90-day bitcoin futures are still trading at a premium to the spot price. Bear markets typically bottom when the premium evaporates.
- Open interest (OI) in a select few tokens such as XAUT$4,877.83, link LINK$9.1346, TRX$0.2803 and $PEPE ($PEPE) has increased.
- Annualized perpetual funding rates for several altcoins flipped negative, a sign of higher demand for bearish plays, which is typical of a downtrend.
- On Deribit, options reflect peak fear, with short-term bitcoin and ether puts trading at a premium of over 10 points to calls.
- Bearish plays like put spreads continue to dominate the bitcoin block flows. Block trades are large bets negotiated privately over the counter.
Token talk
- The altcoin market broadly followed bitcoin during Asia and European hours, with extended losses in privacy coins monero XMR$362.51 and zcash ZEC$247.56, both down by as much as 7%.
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$XRP lost more than 10% overnight after being weighed down by $30 million worth of liquidations. The precipitous fall ramped up a level at 09:00 UTC as prices tumbled from $1.44 to $1.35.
- The one outlier of the altcoin market was derivatives exchange token MYX, which posted a 4% gain in the past 24 hours to build on a year-to-date rally of 56%.
- The bitcoin-heavy CoinDesk 20 (CD20) Index lost 8.34% in the past 24 hours, underperforming the altcoin-dominant CoinDesk 80 (CD80), which dropped 5.92%.
- Several altcoins are now exhibiting signs of a deep downtrend characterized by a series of lower lows and lowers highs not seen since the bear market of 2022.
coindesk.com
