The crypto market is a sea of red as linger trade tensions and tightening liquidity in the U.S. financial system drives demand for safe haven Treasury notes.
Bitcoin has dropped below its 200-day SMA to trade near $104,500, representing a 6% decline in 24 hours. Other major tokens such as ether , , solana , , and BNB are down 8% to 12%.
The CoinDesk 20 Index has dropped nearly 9% to 3,389 points. Meanwhile, the the Crypto Fear & Greed index sits at 22, signaling extreme investor fear for the first time since atleast the April market turmoil.
According to Timothy Misir, head of research at BRN, the sell-off represents a tactical liquidity event layered on macro uncertainty.
“Positioning should be defensive, reduce leverage, keep cash dry, and use staggered spot buys into $104,000–$108,000 if liquidity allows,”Misir said in a note to CoinDesk.
“Structural narratives (ETF adoption, treasuries, network fundamentals) remain intact, but today’s environment rewards discipline: defend core BTC, tread carefully in ETH and alts, and wait for confirmation of sustained buy-side flows before rebuilding directional risk,” he added.
Derivatives Positioning
- The BTC futures market is exhibiting stability, with Open Interest holding steady at approximately $25.7 billion and the 3-month annualized basis remaining firm in the 5-6% range. In a significant shift from previous days, funding rates are now flat across all major venues.
- The BTC options market is exhibiting extreme, conflicting sentiment. The 24-hour Put/Call Volume shows a slight bearish bias with a 45-55 split favoring puts. However, this is overshadowed by the soaring 1-week 25 Delta Skew at approximately 21%. This exceptionally high positive skew indicates aggressive positioning and a massive premium being paid for short-term call options, signaling strong conviction for a near-term rally despite the active demand for downside protection.
- Coinglass data shows $1.2 billion in 24 hour liquidations, with a 78-22 split between longs and shorts. ETH ($414 million), BTC ($268 million) and Others ($109 million) were the leaders in terms of notional liquidations. Binance liquidation heatmap indicates $103,800 as a core liquidation level to monitor, in case of a price drop.
Token Talk
By Oliver Knight
- The entire crypto market is reeling on Friday after continuation to the downside with several assets hitting multi-month lows.
- Ether trades at $3,730 after sliding by more than 7% in the past 24 hours, while the likes of BNB, LINK and SUI are all down by more tha 10%.
- The move was spurred by another $1.2 billion worth of derivatives positions being liquidated, $840 million on the long side, which added to the woes from last weekend when $19 billion was liquidated.
- Equities are also showing weakness with the S&P500 losing 3.3% of its value in the past week, a sell-off that is being mirrored in the more illiquid and speculative crypto market.
- Much of the altcoin market depends on the direction of bitcoin; if it can hold above the psychological level of support at $100,000 and perhaps more importantly the level at $98,000, it could provide the impetus for altcoins to recover.
- If those levels are broken onlookers will be questioning whether the crypto market is slipping back into a dreaded bear market, a cycle that many analysts suggested would not occur this time around due to institutional flows into crypto ETFs and purchasing power from digital asset treasury companies (DATs).
