The crypto market experienced a downturn during the European morning hours, with Bitcoin (BTC) falling to $91,200 after reaching a weekly peak of $94,200 on Wednesday. This decline was primarily limited to the cryptocurrency sector, as U.S. stock markets showed minimal fluctuations in pre-market trading, and the FTSE 100 index climbed by 0.15%. The significant sell-off can be attributed to record withdrawals from BlackRock’s Bitcoin ETF (IBIT), which saw an additional $113 million exit on Thursday, while cryptocurrency bulls struggled to regain control amid ongoing bearish market conditions.
### Market Sentiment Remains Low
The Fear and Greed Index remains depressed at a score of 25 out of 100, failing to move into neutral territory after lingering below 40 for over a month. This persistent low sentiment reflects the cautious mood among investors.
### Derivative Positioning
The BTC futures market indicates a sustained caution and aggressive deleveraging by traders. Open interest (OI) has decreased to $21 billion, down from $25 billion a month ago, suggesting a reduction in leverage and overall risk exposure. This deleveraging coincides with consistently low derivative market metrics: the annualized three-month basis remains stable at 4%-5%, while funding rates are steady between 5%-6% across major exchanges, with no significant changes observed in the past month.
### Options Market Trends
Despite the recent decline in volatility, Bitcoin options exhibit a sustained bullish bias. The term structure of implied volatility (IV) for short-term options has shifted from backwardation to a more typical contango, indicating a reduced expectation for immediate and extreme price fluctuations. Nevertheless, the volume inclination remains bullish, with a 24-hour call/put volume ratio still favoring calls at 57%. Notably, the one-week 25-delta skew has recently increased to 8%, indicating that traders are willing to pay a premium for short-term upside exposure.
### Liquidations and Market Pressure
The recent price volatility for Bitcoin led to $280 million in liquidations within a 24-hour period, with $200 million attributed to long positions. Ethereum (ETH) also saw significant liquidations amounting to $88 million. Data from Coinglass reveals that a considerable number of long liquidations occurred around the $90,600 mark for BTC, a critical level to monitor in the event of further price declines.
### Altcoin Market Struggles
The altcoin sector mirrored Bitcoin’s performance, with notable losses over the past 24 hours. Tokens such as TAO, HYPE, and NEAR each experienced declines of over 6.5%. The most noteworthy development came from Ethereum (ETH), which, following its highly anticipated Fusaka upgrade, retraced 2.62% from its daily high at 03:00 UTC less than a day post-upgrade.
### Broader Implications for Altcoins
The subdued price action of ETH signals broader challenges for the altcoin market, suggesting that even bullish catalysts struggle to gain traction. The CoinDesk 20 index reflected ETH’s decline, while the CDMEME index, which tracks meme coins, dropped by 5.8% in the past 24 hours. CoinMarketCap’s “Altcoin Season” indicator remains stagnant at 21 out of 100, indicating a prevailing bearish sentiment as traders gravitate towards the relative stability of Bitcoin and the safety offered by stablecoins.
### Exceptions in the Market
Two notable exceptions to the overall market decline were Zcash (ZEC) and TRX, the native token of the Tron blockchain, which gained 4.7% and 1.8%, respectively. ZEC’s rise can be attributed to a rebound from a corrective phase where it had become “oversold” according to the relative strength index (RSI). In contrast, TRX appears to be on an upward trajectory, recording gains across daily, weekly, and monthly timeframes.
