The crypto market consolidated on Tuesday with bitcoin and ether trading at $105,000 and $3,550 respectively.
Traders monitor prices to see if they form a lower high, signaling a downtrend, or if they continue to rally.
A fall below $98,000 for bitcoin would confirm the bearish scenario, while a move above the November 2 high of $111,000 would present a bullish outlook.
Recent volatility in the crypto market has been fueled by dollar strength, with the DXY index falling from 96.2 on September 18 to 99.58, with indecisive comments from the Federal Reserve providing little guidance in terms of cutting US interest rates.
Positioning of derivative products
By Omkar Godbole
- The BTC and ETH 30-day implied volatility (IV) indices are oscillating within recent ranges, suggesting a sustained phase of market calm, consistent with Wall Street’s VIX index, which has erased the October peak.
- Nonetheless, the golden cross on BTC IV suggests that the path of least resistance to volatility is on the higher side.
- On Deribit, BTC and ETH puts continue to be more expensive than front-end calls. However, the demand for downside protection for BTC is stronger than for ETH.
- Blockflow on OTC Desk Paradigm had a long position in BTC at the November 29 expiration at the strike price of $80,000 and a call for the call at the November 21 expiration at the strike price of $110,000.
- In the futures market, open interest (OI) in UNI contracts surged 80% in 24 hours, signaling increased price rally participation from leveraged traders. OI in XRP increased by 5% while it decreased for most of the top 10 currencies, including BTC and ETH.
- On the CME, the OI on ether futures fell sharply to 2.10 million ETH.
Symbolic discussion
By Olivier Knight
- The altcoin market cooled on Tuesday, putting ice on a weekend rally that extended into Monday after US President Donald Trump announced a $2,000 dividend for some US citizens.
- Uniswap’s native UNI token outperformed the broader market after a proposal was made to burn millions of tokens, theoretically reducing supply and increasing the price. UNI rose more than 20% after the proposal was announced before consolidating.
- The same kind of optimism was not shared by those trading the new canton network (CC) token. Despite being backed by TradFi giants like Goldman Sachs (GS), HSBC (HSBC), and Broadridge (BR), the token fell 33% on its debut.
- It now trades at a market cap of $3.8 billion despite a 24-hour trading volume of just $55 million, according to CoinMarketCap.
- The Canton network, billed as a layer 1 blockchain for institutions, reached more than 500,000 daily transactions in September, according to data provided by crypto custodian Copper.
- This choppy debut echoes the bearish start of Plasma’s XPL token in October. This amount went from $1.67 to $0.28 one month after going live. XPL fell another 11.5% in the last 24 hours.
- The direction of the broader altcoin market will now depend on whether bitcoin and ether can continue to work their way out of danger and establish new levels of support. A rejection at these levels would create another lower high to confirm a downtrend from the October highs.
