The crypto market received a much-needed boost on Thursday as the two largest tokens rallied, along with bitcoin. price rising to $91,700 and ether at $3,030.
These gains follow stocks’ strong rally on Wednesday. This was led by tech stocks like Alphabet (GOOG) and Nvidia (NVDA), with the Nasdaq Composite posting its best four-day streak since May.
Traders remain focused on bitcoin rather than low-liquidity altcoins. BTC’s 5.4% gain over the past 24 hours outperformed 18 of the 20 largest crypto tokens by market capitalization.
This was reflected in CoinMarketCap’s “altcoin season” indicator, which remains at a low level of 22/100, down considerably from the October high of 67/100.
Positioning of derivative products
- Bitcoin’s 30-day implied volatility index, BVIV, fell further to 50%, almost entirely retracing last week’s peak of 65%, according to TradingView data.
- Traders gathered in a bullish year-end call-condor structure, ranging from $100,000 to $118,000, worth a $6.5 million premium, according to Deribit Insights.
- This signals expectations of a potential “Santa Rally”, although consistent cancellation of calls around $100,000 and easing of downside hedging have helped keep implied volatility in check.
- Open interest in Bitcoin remained consistent with price gains over the past 24 hours, indicating that the move was driven by spot buying rather than futures activity.
- Altcoin Derivatives Painted a Different Story: Open Interest in Ether Solana and particularly zcash has risen disproportionately to suggest traders are flocking to the risk-taking approach of buying with leverage, according to Coinalyze.
- Total trading volume on Wednesday mirrored that of Tuesday, and a slight lull on Thursday can be attributed to the U.S. Thanksgiving holiday.
Symbolic discussion
- The altcoin market, while generally lagging bitcoin, showed signs of strength on Thursday.
- The SKY token, formerly MKR, rose 10% as it began to show signs of a reversal from last week’s low of $0.041.
- Gains were also seen for DASH, ETHFI, and AVAX, which all rose between 6.7% and 7.7%.
- Optimism was uncorrelated across the market: And both fell more than 2%, suggesting that optimism was not unanimous across the board.
- The crypto market’s average Relative Strength Index (RSI) shows it is heading into “overbought” territory, with tokens like AVAX, SPX, and PENDLE firmly in the overbought zone, suggesting a pullback could be on the cards by Friday unless significant demand and volume can be sustained.
- The altcoin market ultimately depends on bitcoin’s next move. If bitcoin can begin to break the downtrend that began in October and return towards $100,000, altcoins will likely follow. However, if it gives back this week’s gains and begins to fall into difficulty at the $80,000 low level, altcoins will underperform and potentially break out above their own support levels due to a low liquidity environment.
