Bearish October Continues as Altcoins Dealt Hammer Blow

The crypto market was dealt another grueling sell-off on Thursday, with several altcoins facing double-digit moves to the downside while BTC and ETH began to challenge critical levels of support.

The move appears to be a continuation from the weekend’s $500 billion bloodbath, with traders now actioning more caution to avoid another potential liquidation cascade.

Derivatives Positioning

• The BTC futures market continues to stabilize, with Open Interest holding firm around $25 billion. The 3-month annualized basis has also remained steady, trading in the 5-6% range. However, a notable divergence in funding rates highlights a mixed market sentiment; Binance and OKX now have negative funding rates of -2% to -3%, while other platforms are either flat or slightly positive. This negative funding on major exchanges indicates that a large number of traders are holding short positions, suggesting a degree of bearish conviction despite the stable open interest and basis.
• The BTC options market shows a strong bullish signal. The 24-hour Put/Call Volume is now roughly balanced, indicating steady demand from both sides. However, the most significant metric is the 1-week 25 Delta Skew, which has spiked to 12.62%, suggesting that traders are willing to pay a substantial premium for call options and are aggressively positioning for a price increase.
• Coinglass data shows $415 million in 24 hour liquidations, with a 70-30 split between longs and shorts. ETH ($115 million), BTC ($80 million) and Others ($43 million) were the leaders in terms of notional liquidations. Binance liquidation heatmap indicates $110,009 as a core liquidation level to monitor, in case of a price drop.

Token Talk

By Oliver Knight

• Altcoins were dealt another day or decimation on Thursday as several assets faced double-digit declines.
• TAO$375.65, aster ASTER$1.2540 and lido (LDO) all fell between 12% and 13% over the past 24 hours, with CoinMarketCap’s “altcoin season” index sliding to 27/100, its lowest point in more than three months.
• Crypto majors BTC and ETH are still around respective levels of support at $110,000 and $4,000, although sentiment has shifted bearish after the market failed to recover from last weekend’s $500 billion wipeout.
• One outlier from Thursday’s sell-off was TRX$0.3219, which rose from intraday lows of $0.312 to $0.322 as it begins to show strength and signs of recovery.
• There are multiple catalysts behind the recent sell-off; notably distribution from long-term holders of bitcoin, which has created an environment with heavy sell pressure coupled with a lack of demand.
• Altcoins are often negative recipients from downside in bitcoin and liquidity levels, especially following the weekend’s leverage blowout, remains low. This means that when a sell-off occurs, prices rapidly take out levels of support until sufficient liquidity is found to meet the demand of sellers.