The crypto market consolidated on Tuesday with bitcoin BTC$105,320.13 and ether ETH$3,579.82 trading at $105,000 and $3,550, respectively.

Traders are keeping an eye on whether prices to see if they form a lower high, signaling a downtrend, or continue to rally.

A drop below $98,000 for bitcoin would confirm the bearish scenario, while a move above the Nov. 2 high of $111,000 would present a bullish outlook.

Recent volatility in the crypto market has been driven by dollar strength, with the DXY index rallying from 96.2 on Sep. 18 to 99.58 as indecisive comments from the Federal Reserve provide little guidance in terms of cutting U.S. interest rates.

Derivatives positioning

By Omkar Godbole

• BTC and ETH 30-day implied volatility (IV) indexes are hovering within recent ranges, suggesting a sustained phase of market calm, consistent with Wall Street's VIX index, which has erased the October spike.
• Still, the golden cross on BTC's IV suggests the path of least resistance for volatility is on the higher side.
• On Deribit, both BTC and ETH puts continue to be pricier than calls at the front-end. However, demand for downside protection in BTC is stronger than ETH.
• Block flows over OTC desk Paradigm featured a long position in the Nov. 29 expiry BTC put at the $80K strike price and demand for the Nov. 21 expiry call at the $110K strike.
• In futures market, open interest (OI) in UNI contracts has surged 80% in 24 hours, signaling increased participation in the price rally by leveraged traders. OI in XRP has increased by 5% while declining for most top 10 currencies, including BTC and ETH.
• On the CME, OI in ether futures has pulled back sharply to 2.10 million ETH.

Token talk

By Oliver Knight

• The altcoin market cooled on Tuesday, putting ice on a weekend rally that carried over into Monday after U.S. President Donald Trump announced a $2,000 dividend for some U.S. citizens.
• Uniswap's native UNI token outperformed the wider market after a proposal was made to burn millions of tokens, theoretically reducing supply and lifting the price. UNI rose by more than 20% after the proposal was announced before consolidating.
• The same kind of optimism wasn't held by those trading the newly released canton network (CC) token. Despite being backed by the TradFi giants like Goldman Sachs (GS), HSBC (HSBC) and Broadridge (BR), the token fell by 33% on its debut.
• It now trades at a $3.8 billion market cap despite notching just $55 million in 24 hour trading volume, according to CoinMarketCap.
• The Canton Network, promoted as a layer-1 blockchain for institutions, reached more than 500,000 daily transactions in September, according to data provided by crypto custodian Copper.
• The stuttering debut echoes the bearish start of Plasma's XPL token in October. That dropped from $1.67 to $0.28 one month after going live. XPL fell by a further 11.5% in the past 24 hours.
• The direction of the wider altcoin market will now depend on whether bitcoin BTC$105,320.13 and ether ETH$3,579.82 can continue to claw their way out of danger and establish fresh levels of support. Rejection at these levels would create another lower high to confirm a downtrend from October's peaks.