The drop comes on the heels of U.S. producer price inflation data easing to 4.7%, below expectations. This led to increased gains in equities and futures markets, which contrasted with the crypto market’s underperformance. Derivatives positioning showed a balanced long-short taker ratio in Bitcoin futures, indicating churn rather than new investment flows.
The situation is further exacerbated by the negative CVD (Contract Value Difference) for both BTC and ETH, pointing to a market dominated by bearish sentiment. HBAR’s funding rates were the most negative among top 25 tokens, at around -20%, suggesting significant bears’ influence on the market. All top 25 cryptocurrencies displayed negative CVD.
Additionally, Bitcoin’s implied volatility index (BVIV) fell below 36% after a spike earlier this week, indicating continued interest in overwriting strategies aimed at generating extra yield on top of spot holdings for both BTC and ETH. On Deribit, options bets showed mixed patterns with calls at $70k, $69k, and $67k strikes being the most-traded for BTC, while puts at $1,700 and $1,780 were more popular for ETH.
This combination of market sentiment, derivative data, and option activity underscores Bitcoin’s precarious position amidst broader crypto market challenges.
Written by Oliver Grant
Markets Desk
