The crypto market fluctuated between key levels of support and resistance on Wednesday, with bitcoin BTC$108,033.92 trading at $107,800 and ether ETH$3,859.15 at $3,830, demonstrating indecision from traders and holders.
A breakdown in bitcoin price below $102,000 would indicate the continuation of a bearish trend that would likely prompt an accelerated drawdown to at least $98,400, which would have an amplified effect on the altcoin market due to a relative lack of liquidity.
If bitcoin can claw its way back to around $120,000, however, that would indicate a reversal from the short-term downtrend and would put fresh record highs back on the card.
Derivatives Positioning
By Omkar Godbole
- ZEC$269.27 futures open interest (OI) has surged 22% to $303 million in the past 24 hours, leading growth in select few major coins such as ENA, BCH, HYPE, ADA, AVAX and BTC.
- Futures tied to LINK, XPL and PUMP experienced capital outflows, reflecting heightened investor risk aversion amid volatile market swings.
- Annualized perpetual funding rates for most major cryptocurrencies, including BTC and ETH, remain close to zero, indicating a balanced derivatives market.
- BTC's order book heat map showed a cluster of sell orders around $111K in the Binance-listed BTC/USDT perp.
- On the CME, OI in ether futures hit a record 2.43 million ETH, with OI in options steady near the lifetime peak of 297K ETH. BTC, however, continued to lag in terms of futures OI, which held at roughly 142K, significantly lower than the peak of over 200K late last year. The divergence points to institutional investors' preference for ETH over BTC.
- On Deribit, flows featured short strangles and call overwriting strategies in BTC, with some demand for puts as protection against deeper slides. In ETH's case, the focus was near-dated put spreads and calendar spreads, according to Wintermute.
- In BTC's case, puts traded at a premium to calls across all tenors. However, TH options exhibited bullishness beyond the December expiry.
Token Talk
By Oliver Knight
- ZEC$269.27 continued its ascent on Wednesday, leading the otherwise weak altcoin market with a 9.2% move to the upside over 24 hours.
- The privacy token is now up a staggering 461% in the past month and continues to hit record highs.
- The catalyst behind ZEC's rise is boosted sentiment around the growth of shielded tokens, which currently account for 27.5% of the total supply.
- Shielding is a privacy mechanism that masks transactions. Shielded tokens must be held in a non-custodial wallet, in other words not an exchange.
- With so much supply held in private wallets, the premise is that sellable supply is constricted.
- Couple a reduction in supply with surging demand and this is the result: A relentless rally to the upside that has outperformed almost every crypto token in circulation.
- ZEC's gain has been a rare sign of optimism over the past few weeks as several other tokens have plummeted to multimonth lows.
- ASTER, which was often dubbed the plat du jour in September, sank below $1.00 on Tuesday to compound a 33% slide over the past week.
- Recently issued plasma XPL$0.3789 tokens have also found themselves on the sell-side of order books, with demand and hype quickly fading resulting in a 25% drawdown in the past seven days.
