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Bitcoin fails to sustain breakout momentum as rate hikes beckon: Crypto Markets Today

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Bitcoin fails to sustain breakout momentum as rate hikes beckon: Crypto Markets Today

Crypto markets demonstrated fragility on Friday, with bitcoin trading narrowly above a psychological level of support at $70,000.

The largest cryptocurrency broke above this level on Wednesday, rising to as high as $74,000 before failing to capitalize on a lower-liquidity zone above, and falling back alongside U.S. equities.

The intensifying war in the Middle East pushed oil to a new cycle high of $85 per barrel. Brent crude has risen roughly 42% since the start of the year. The surge in energy costs, alongside growing uncertainty around Iran, has prompted traders to reassess the inflation outlook in Europe, with money markets now even pricing the possibility of a European Central Bank rate increase by year-end — a sharp reversal from expectations for rate cuts in 2025.

Higher interest rates would typically weigh on bitcoin and the broader crypto market, as investors shift toward safer assets that offer attractive yields without the volatility associated with risk assets.

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The altcoin market has also shown signs of weakness over the past week according to Santiment’s social volume tracker, which indicates that social media sentiment for the speculative market is nearing rock bottom.

Derivatives positioning

  • The market is consolidating as bitcoin open interest (OI) rises to $16.16 billion from $15 billion last week, indicating a return of speculative interest.
  • While retail funding remains stable in the 0%-to-10% range, Binance has flipped to -2.5%, signaling a localized surge in short hedging.
  • Three-month basis is holding at 2.7%, a sign that institutional conviction remains soft.
  • The options market has shifted toward cautious optimism. The 24-hour call volume split has tightened to 51/49 and the one-week 25-delta skew has cooled to 8% (from 15%), significantly lowering the cost of downside protection.
  • While longer-dated implied volatility (IV) remains stable near 50%, the near-term has spiked into sharp backwardation, a signal that traders are pricing in an immediate, high-impact volatility event before a return to mid-term growth.
  • Coinglass data shows $257 million in 24-hour liquidations, with a 70-30 split between longs and shorts. BTC ($121 million), ETH ($51 million) and others ($15 million) were the leaders in terms of notional liquidations.
  • The Binance liquidation heatmap indicates $71,600 as a core liquidation level to monitor, in case of a price rise.

Token talk

  • Decentralized finance (DeFi) tokens MORPHO and JUP led Friday’s selloff, losing between 2% and 3% since midnight UTC as traders rotated out of speculative tokens back into dollars.
  • OKX’s native OKB token was the top gainer in the past 24 hours, rising by 23% after trading giant Intercontinental Exchange (ICE) signed a deal with the exchange to introduce tokenized stocks and crypto futures products.
  • There were also substantial gains for KITE and RIVER, each rising around 15% in the past 24 hours to continue their impressive starts to the year.
  • Privacy tokens continued to lose ground with zcash (ZEC) and decred (DCR) dropping 6% in the past 24 hours and the downturn accelerating since midnight UTC.

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Crypto World

Bitcoin Traders Bet On Sub-$66K BTC In April Due To Rising Fear

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Bitcoin Traders Bet On Sub-$66K BTC In April Due To Rising Fear

Key takeaways:

  • Bearish sentiment is rising as Bitcoin options professional traders lose confidence that the $66,000 level will hold for long.

  • The exit of David Sacks as the Crypto and AI czar and a lack of a clear US Strategic Bitcoin Reserve plan added to investors’ doubts.

Bitcoin (BTC) fell to $65,530 on Friday, an 8% decline from the $71,300 level seen on Thursday. This move wiped out over $210 million in leveraged bullish Bitcoin futures and left most call (buy) options worthless during the $18.6 billion monthly expiry. Traders now anticipate a 53% chance that Bitcoin will stay below $66,000 by April 24.

April 24 Bitcoin option prices at Deribit. Source: Deribit

On Friday, the April 24 Bitcoin $66,000 put (sell) options traded at 0.0566 BTC or roughly $3,730. With a 53% implied probability of Bitcoin trading below $66,000 by late April, the mood remains decidedly bearish following the increased uncertainty in the US and Israel-Iran war, pushing traders into a risk-averse mode.

US inflation threats and stalling crypto, Bitcoin legislation

Rising oil prices and a potential $200 billion in extra US military spending led investors to demand higher returns on government bonds and dragged the S&P 500 to its lowest levels since September 2025. West Texas Intermediate (WTI) oil surged to $100 on Friday, while 5-year Treasury yields reached 4.07%, up from 3.72% three weeks prior.

US 5-year Treasury yield (left) vs. S&P 500 (right). Source: TradingView

Inflationary fear and weaker corporate earnings perspectives alone cannot explain Bitcoin’s 20% underperformance against the S&P 500 in 2026. Other factors are likely at play, including investors’ discomfort over the lack of progress on the US Bitcoin Strategic Reserve.

David Sacks has stepped down from his role as the Trump administration’s crypto and AI czar. While Sacks remains an advisor on the President’s Council on Science & Technology, his departure follows earlier comments that inflated Bitcoin investors’ expectations. Sacks had previously hinted that the US could acquire more Bitcoin through budget-neutral methods without raising taxes.

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Related: US lawmakers publish crypto tax proposal without Bitcoin tax exemption

Bitcoin 30-day options delta skew (put-call) at Deribit. Source: Laevitas

The Bitcoin options delta skew jumped to 15% on Friday, showing that put options are trading at a significant premium relative to call instruments. In balanced market conditions, this metric usually ranges between -6% and +6%. The current level indicates a lack of conviction among whales that the $66,000 level will hold. Fear has largely dominated the Bitcoin options market since mid-January.

Bitcoin options expiry favored neutral-to-bearish strategies

Friday’s monthly options expiry at $68,610 proved unfavorable for neutral-to-bullish strategies, as 97% of call options became void. Bears gained the upper hand as put options at $69,000 or higher surpassed $2 billion in open interest. Critically, part of Friday’s downward move reflects a growing unwillingness among traders to maintain Bitcoin exposure over the weekend.

Crypto markets cut risk on Friday due to uncertainty. Source: X/WhalePanda

X social platform user WhalePanda, suggested that the crash in risk markets anticipates President Trump making “another dumb escalating move” after US markets close. Consequently, the current fear seen in the options market could reverse if no major geopolitical events occur before Monday.

During bearish cycles, traders often rush for the exits at the mere sight of any event that could be deemed negative. Investors should not take Bitcoin’s implied odds at face value, as these metrics are heavily impacted by recent news and headlines. However, expectations could shift more favorably if Iran effectively releases a counter-offer to the US peace proposal.