The crypto market fell on Wednesday after the risk-off mood increased among investors following fresh air strikes in Iran. The CoinDesk 20 index is down 2.9% since midnight UTC, with all but one coin leading the decline.
According to news reports, while addressing NATO leaders, US President Donald Trump declared the ceasefire “over” and said that negotiating with Iran is a “waste of time”, although talks are continuing.
US Central Command said it attacked more than 60 Islamic Revolutionary Guard Corps small boats to prevent them from disrupting international shipping, and Iran retaliated with attacks on Kuwait and Bahrain.
The dollar index (DXY) rose as a resurgence of tensions is likely to increase inflation concerns. Bitcoin And ether (ETH), the two largest cryptocurrencies, fell more than 2%.
The more illiquid altcoin sector suffered sharp losses as JUP, ETHFI and PUMP all fell by more than 5%.
The American stock market was also affected. Nasdaq 100 index futures and S&P 500 index futures fell as much as 1.5%.
derivatives positions
- Despite Bitcoin falling to $62,000, it’s still up 6% this month and there’s some good news on the derivatives front: Traders don’t want to play down the rally. Open Interest (OI) in futures has decreased to 730K BTC from 740K BTC a day earlier.
- Ether’s performance is not so good. Open interest remains stable at around 13.95 million tokens despite the liquidation of $90 million worth of stakes due to the spot-price decline. BTC’s 24-hour liquidations are just over $100 million.
- The selloff in Canton Network’s CC token has intensified, with the token’s price falling to its lowest level since January, as futures open interest hit a two-week high. This combination points to the potential for traders to minimize the downside, especially since funding rates remain highly negative, near -20%.
- Broadly speaking, the bearish grip on major cryptocurrencies including BTC and ETH has strengthened, as indicated by their negative 24-hour OI-adjusted cumulative volume delta. A negative reading indicates that the price action is being driven by traders placing market orders rather than passive limit orders.
- The latest declines in BTC and ETH appear to have increased hedging demand for options, as their respective 30-day implied volatility indices, BVIV and EVIV, are up for the second day in a row.
- The options bias on Deribit confirms this. The one-week bias has increased to about 20% in favor of puts from 16% a day earlier. The put provides protection against a price decline in the underlying asset, in this case, BTC. The same is true for ether.
- However, 24-hour volume figures show the most activity in BTC call options at the $80,000 strike price.
symbolic thing
- According to CoinGlass, the altcoin market is in crisis, with $350 million of the $450 million in liquidations being attributed to altcoin trading pairs.
- Solana (SOL) has now fully recaptured the rally that started on July 2, trading back at $77 after challenging $84 on Monday.
- One token reducing the bearish sentiment is Morpho. According to DefiLlama, the DeFi token is up 4% since midnight as the total value locked (TVL) on the protocol reached a record high of 4 million ETH this week.
- The silver lining for the altcoin market is that many tokens are now moving back into “oversold” territory, with the average Relative Strength Index (RSI) falling to 40/100 from 47/100 on Tuesday.