The crypto market traded in a tight range on Friday with bitcoin changing hands at $88,950 and ether losing around 1% since midnight UTC at $2,920.
Performance is in line with US equities. Nasdaq 100 and S&P 500 index futures lost 0.4% and 0.25%, respectively, over the same period.
Precious metals gold and silver extended their advances to record highs this week as traders rushed to safe haven assets, a sign of risk aversion in the markets.
This sentiment can be attributed to the first trilateral negotiations between Ukraine, Russia and the United States on Friday, with investors not appearing hopeful that a resolution to the conflict will be found.
The altcoin sector showed signs of slight strength despite broader weakness. LayerZero’s ZRO token is up 12% in the past 24 hours as traders anticipate a major upgrade planned for early February, while TRX and DASH are both up around 3%.
Positioning of derivative products
- More than $200 million in crypto futures bets were liquidated in 24 hours, with long positions (bullish coins) accounting for the majority of the total. This has been the case since the start of the week, with the drop in prices having caught the bulls off guard.
- Bitcoin’s 30-day annualized implied volatility index, BVIV, has fallen back to 40%, reversing Tuesday’s brief rise to 44%. This decline shows investors’ continued interest in selling volatility through strategies such as covered calls.
- Ether is the only token in the top 10 to see a slight increase in futures open interest (OI) in 24 hours. Others, including BTC, ETH, XRP, SOL, have experienced capital outflows.
- The OI-adjusted cumulative volume delta indicator shows net purchases on the TRX, ZEC, and BCH markets. Other markets, including BTC, saw net selling.
- On Deribit, ether short and close Put options are more expensive than BTC, a sign that traders are more bearish on Ethereum’s native token.
- Block flows featured bias for BTC straddles, volatility betting, and ETH put spreads.
Symbolic discussion
- The “altcoin season” indicator rose from 24/100 to 29/100 last week as traders attempted to extract gains from an otherwise tame market.
- The bitcoin-dominated CoinDesk 20 Index (CD20) has lost around 0.6% since midnight UTC, while the memecoin, DeFi and metaverse metrics are all in the black.
- Lack of liquidity continues to affect the altcoin market, with a market depth of 2% for an asset like for example, between $580,000 and $700,000. That means it would take an order between these two numbers to move the $3.7 billion market by 2%.
- It is worth noting, however, that if the market as a whole begins to recover, the altcoin’s gains could be exaggerated due to the lack of sell orders in the order book.
- The best performing sector of the year continues to be metaverse tokens, with the CoinDesk Metaverse Select Index (MTVS) posting a 50% gain since January 1, supported by the strong performance of axie infinity (AXS) and .
