What to know : The crypto Fear and Greed index fell to 11, its lowest level this year, as BTC and ETH dropped more than 7% and altcoins followed. More than $800 million in leveraged positions were liquidated in 24 hours, open interest fell to $103 billion, and options markets show peak fear with puts trading at steep premiums to calls. Elevated oil volatility tied to U.S.-Iran tensions and broader risk-off sentiment are weighing on higher-beta assets, while analysts warn a break below $70,000 could trigger another wave of selling.
Bitcoin and ether extended their descents over the past 24 hours, each dropping by more than 7% as a wave of bearish sentiment gripped the market.
The Fear and Greed index fell to 11.00, the lowest this year, indicating extreme bearish sentiment.
"Bitcoin has returned to an area that was a strong resistance from March to October 2024. This explains the current interest of bargain hunters," Alex Kupsikevich, chief market analyst at The FxPro, said in an email to CoinDesk.
"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 , link , 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 and zcash , both down by as much as 7%.
- 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.
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