The dollar index’s rally gathered pace early Wednesday, but that didn’t stop gold from climbing to new highs above $4,000.
Bitcoin also recovered from Asian session lows near $121,000 to trade near $122,750 at press time. The cryptocurrency is still down 1.3% over 24 hours. The CoinDesk 20 index is down more than 3% at 4,229 points. Gold tokens, XAUT and PAXG, are trading higher, taking cues from gold spot prices. Meanwhile, BNB, CAKE, and HASH are trading higher on a 24-hour basis.
Analysts maintained a bullish outlook. “The signal has not changed: ease dollar strength, go long gold and falling BTC, and prepare for data gap volatility,” Singapore-based QCP Capital said in a market update.
Positioning of derivative products
By Omkar Godbole
- Most major tokens saw a decline in futures open interest (OI) over the past 24 hours, with AVAX being a notable exception, posting a 2% rise in OI.
- This widespread decline suggests that recent price declines are largely due to profit-taking rather than an increase in bearish positions.
- Perpetual funding rates remain stable at or below 10% annualized, reflecting slight bullish sentiment in the market.
- On the CME, Ether futures open interest decreased to 2.16 million ETH from Monday’s high of 2.34 million. Despite this decline, the overall positioning remains relatively high, especially when compared to bitcoin’s open interest price, which is still well below its December 2024 high.
- BTC and ETH futures premiums on the CME continue to trade below 10%.
- On Deribit, the Bitcoin options market has a slightly negative skew across all durations, indicating that puts are slightly more expensive than calls. Block trades primarily feature Bitcoin bull call spreads and outright out-of-the-money Ether buy spreads.
Symbolic discussion
By Olivier Knight
- BNB chain activity continues to dominate the altcoin sector this week; generating a daily gain of 10% for and a 3% increase for BNB despite the general market cooling.
- Spot trading volume on PancakeSwap reached $19 billion in the last 24 hours as traders attempt to capitalize on the latest wave of hype; Chinese-language memecoins that, in some cases, have already exploded to valuations in excess of $350 million.
- The shift in momentum toward BNB Chain versus Solana began after the emergence of Aster, a decentralized perpetual exchange that has consistently surpassed $100 billion in daily volume despite complaints about trade flow disparities.
- The total value locked (TVL) on BNB Chain has increased from $6.5 billion to $9 billion since June, although it remains well below its record of $26.3 billion set in 2021, suggesting that the ecosystem has more room to grow.
- Much of the network’s growth will also depend on the direction of the broader crypto market; BTC and ETH both gave up gains on Wednesday as the market begins to consolidate after another failed breakout.
- A downward move would likely weigh on the BNB chain, as crypto traders often downplay risks by turning to stablecoins, thereby reducing demand for speculative memecoins.
