The crypto market was little changed on Thursday, with bitcoin and ether (ETH) posting gains of less than 1% as investors consolidated after Wednesday’s breakout.
Although bitcoin held above the $70,000 level that had fended off previous rallies, it failed to generate an upward shift toward $80,000, as some analysts had predicted.
Global stocks reacted well to reports that Iran had secretly contacted the United States in hopes of striking a deal to end the war in exchange for limiting its missile production.
The Dollar Index (DXY) fell as a result, but remains up 3.5% since late January as traders try to rationalize possible interest rate changes by the Federal Reserve. A disruption in the Strait of Hormuz would increase inflation, forcing the Fed to raise rates to keep deposits high.
Bitcoin generally rises when the dollar weakens and falls when the currency is bullish.
Positioning of derivative products
- Bitcoin futures open interest (OI) increased, with the total increasing to 680,000 BTC, the highest in almost two weeks. This trend confirms the gains in spot prices.
- Ether’s OI increased to 13.41 million ether, the highest since January 31. XRP futures activity remains subdued, with OI stuck at its recent low below 1.70 billion XRP. The same can be said for Solana’s SOL.
- OI in futures contracts linked to gold tokens Tether gold (XAUT) and continues to fall as cryptocurrencies rise. Investors could invest in major currencies as the rise in gold prices falters.
- Privacy-focused ZEC futures activity is also picking up, with total OI ending a two-month downtrend.
- The annualized perpetual funding rates for Bitcoin and Ether remain slightly positive, indicating a bullish bias. However, rates remain slightly negative for XRP and SOL.
- The 30-day implied volatility indices for Bitcoin and Ether remain stable within recent ranges, indicating market stability. Wall Street’s volatility index, VIX, fell to 21% from Monday’s high of 28%.
- On Deribit, biases in Bitcoin and Ether options have weakened, but persist alongside increased activity in higher strike calls or bullish bets.
- Block flows into options presented demand for call schedule diagonal spreads on Bitcoin and Ether.
Symbolic discussion
- The MANTRA layer 1 token has completed a migration and token renaming, replacing the old OM token with the ticker MANTRA and implementing a 1:4 renaming, resulting in a 25% increase in the token price over the last 24 hours.
- Privacy tokens’ bullish narrative at the start of the year fell flat in February as ZEC, DASH, and
- Crypto majors led the market’s gains over the past 24 hours, with the CoinDesk 5 (CF5) and CoinDesk 10 (CD10) indices each up around 3.1%. The DeFi Select Index and the Computing Select Index only increased by 0.4% and 0.7%, respectively, during the same period.
- If Bitcoin can continue to move towards $80,000 and consolidate, then profits could be reinvested in more speculative altcoin bets, but for now the market remains cautious.
