Bitcoin holds steady after Sunday's rally, though full-fledged reversal may take longer

Bitcoin held above $63,000 on Monday, looking to build on a 4% Sunday rally spurred by Strategy (MSTR) Executive Chairman Michael Saylor hinting at further purchases of the largest cryptocurrency. Saylor's stance is a signal markets take seriously given the company's track record of aggressive accumulation.

Bitcoin's stability is breathing life back into lesser-tracked corners of the market. Audiera's BEAT token has surged 78% in the past 24 hours and Siren's SIREN added 33%, making them the two best-performing coins among the top 100 by market cap. Audiera is a Web3 entertainment and rhythm gaming platform built on $BNB Chain that treats AI characters and virtual idols as economic participants. Siren is also a $BNB-based Web3 AI project. The catalysts for the moves are unclear.

The broader market recovery hinges on what bitcoin does next. It is currently trading near its 200-week simple moving average, a level that has historically acted as a long-term support and a key battleground between bulls and bears at major cycle turning points.

"The sentiment index plummeted to 8, once again showing single-digit values on Monday, following a two-month hiatus and failed attempts to consolidate in positive territory. Judging by the dynamics near Bitcoin’s 200-week moving average and the sentiment index, the situation resembles mid-2022," Alex Kuptsikevich, the chief market analyst at FxPro said in an email.

"Under similar conditions at that time, the downward momentum weakened, but a full-fledged reversal did not occur until many months later," he wrote.

Derivatives positioning

• Bitcoin's futures open interest collapsed to 716,000 $BTC from a record 901,000 $BTC just four days ago, a stark illustration of how brutally last week's price crash wiped out leveraged positions across the market.
• One silver lining: the decline in open interest suggests traders largely didn't pile into new shorts during the selloff, meaning the move was driven by forced long liquidations rather than aggressive bearish conviction.
• Ether ($ETH) tells a similar story. Open interest has pulled back to 14.58 million $ETH from 15.98 million $ETH late last month.
• is the standout coin of the past 24 hours. Open interest has jumped over 13% in the past 24 hours to 1.64 million $BCH, the highest level since July 2023, even as its price bucked the recovery with an 8.3% slide. Rising open interest against a falling price typically signals short accumulation, and $BCH's negative 24-hour cumulative volume delta confirms it: Traders are actively shorting at market prices rather than placing limit orders. The setup points to persistent bearish sentiment and potential for further losses.
• Canton Network's CC token is also seeing an uptick in open interest.
• On the volatility front, the stabilization in bitcoin is showing up in so-called fear gauges. The 30-day annualized implied volatility index BVIV has retreated to 50% from a peak of nearly 59% on Friday, suggesting the acute stress is fading and conditions are supportive of at least some consolidation. Ether's implied volatility pulled back to 69% from 75%.
• Options market sentiment has shifted noticeably. The five most actively traded instruments on Deribit in the past 24 hours are all calls, including a $170,000 strike expiring Dec. 25. That's a bet bitcoin will rally above that level before year-end. These deep out-of-the-money calls function as cheap lottery tickets: small premium, long odds and a massive payoff if the trade comes good.
• One risk factor remains. The dealer gamma profile around $60,000 continues to point to a setup where market makers may be forced to trade in the direction of price moves to rebalance their books, a dynamic that could amplify swings in either direction.

Token talk

• Zcash ($ZEC) has rebounded 45% from last week’s low after developers proposed a fix for a critical counterfeiting bug in its privacy-focused Orchard pool.
• The Ironwood proposal would move users to a new, repaired privacy pool and let anyone running Zcash software verify that no more than the correct amount of $ZEC exists.
• As coins migrate out of the old pool, any counterfeit $ZEC would either be exposed or stranded and destroyed, potentially revealing whether the flaw was ever exploited, though developers say abuse is unlikely.
• Elsewhere, Tether's dollar-pegged stablecoin $USDT briefly overtook ether ($ETH) in market capitalization over the weekend as the latter fell alongside the broader market.
• Ether slid from $2,000 to just over $1,500 from Friday to Sunday, bringing it to a $183 billion market cap compared with $USDT's $186 billion. The token has recovered since, bringing it back above $USDT, though it remains far below bitcoin 's $1.2 trillion level.