The crypto market edged lower on Wednesday, with bitcoin falling about 0.9% since midnight UTC to $65,900 and ether (ETH) shedding 0.5% to $1,920.
The pullback came after the largest cryptocurrency rose to its highest point in more than a month on Tuesday, with a degree of profit-taking always a likely outcome.
One major macroeonomic influence was the surge in the WTI crude price. The U.S. oil benchmark topped $85 per barrel for the first time since June 12 as the Iran conflict escalated, reviving the inflation concerns that have weighed on risk assets for much of the year.
Nasdaq 100 and S&P 500 index futures both fell while gold climbed 0.95% to $4,118 and silver gained 1.2% as investors flocked to haven assets.
The demand for safety was visible in crypto assets too, with bitcoin’s dominance climbing to 59% as capital retreated from altcoins and stablecoins into the relative safety of the largest token.
Derivatives positioning
- Market activity slows down: Trading volume over the past 24 hours dropped 12% to $150 billion, while open interest (OI) remained static around $116 billion. With just $165 million in liquidations, the market appears to be taking a breather.
- Long/short ratio tightens: The 24-hour long/short ratio stands at 50.59/49.41, a tighter and more indecisive reading than a day ago. While technically every long position is matched by a short in terms of total contracts, this ratio specifically tracks the number of accounts that are net-long versus net-short. The tightening suggests that the bullish bias seen yesterday is evaporating.
- Short interest builds in HYPE: Hyperliquid’s HYPE token has dropped over 6% over 24 hours, one of the biggest losers among major tokens. The decline comes alongside a marked upswing in futures open interest to 42.8 million HYPE, the highest level since June 4. With annualized perpetual funding rates slightly negative and the 24-hour cumulative volume delta (CVD) in the red, the data suggests a clear bias for short positioning. Traders appear to be aggressively positioning for, or anticipating, a deeper price drop in the token.
- Bearish momentum continues in XLM: Open interest in XLM futures rose for a third straight day to a total of 1 billion tokens. XLM is also reporting a negative 24-hour CVD, a sign that bears are leading the price action by shorting through market orders rather than limit orders. Consequently, it is no surprise that the token’s price has failed to maintain gains above 19 cents for the second consecutive day.
- Steady open interest in top-tier assets: OI in BTC and ETH has held steady over the last 24 hours. This lack of movement signals that there has been very little position adjustment or conviction to change exposure despite spot prices pulling back from the highs reached on Tuesday.
- Broad-based bear leadership: Most major cryptocurrencies, excluding XMR, XAUT and HBAR, are exhibiting negative 24-hour CVDs. This confirms that the current market environment is characterized by broad-based bearish leadership, with sellers more active than buyers at current levels.
- Rising volatility expectations: Bitcoin’s 30-day implied volatility index (BVIV) has increased to 40% from 37.5%, a sign that traders are beginning to pay a higher premium for protection as they anticipate more turbulent price action ahead. The ether volatility index (EVIV) is also showing signs of increased buoyancy.
- Demand for upside exposure in options: BTC calls continue to dominate the 24-hour volume rankings on Deribit, with activity heavily concentrated in the $70,000 and $72,000 contracts. Calls provide traders with bullish exposure to the underlying asset, suggesting that some are looking past the current decline. Ether options are also seeing a preference for calls, with the $3,000 strike emerging as the most-traded contract over the past 24 hours.
Token talk
- Dash (DASH) led losses on Wednesday, falling 4.1% since midnight UTC to $33.44, with hyperliquid (HYPE) not far behind, losing 3.42% to $58.79 as the decentralized exchange’s token continues to retrace from last month’s highs.
- Midnight (NIGHT) was the standout gainer of the past 24 hours, surging 19%, following a selloff on Monday. Charles Hoskinson, founder of the Cardano blockchain platform, described the project on X as an “incredible ecosystem with “wonderful technology.”
- Ether.fi (ETHFI) and ethena (ENA) bucked the broader weakness, rising 2.63% and 1.27%, respectively, to extend a run of outperformance from DeFi tokens.
- Ondo is among the week’s more compelling movers, up 26% over seven days to $0.40 as tokenized real-world assets continue to attract speculative interest despite the subdued macro environment.
- CoinMarketCap’s Altcoin Season indicator read 50/100, down slightly from last week’s high as investors focused back on bitcoin.
