BTC, ETH Prices Sink to Lowest in Months as Liquidity Dries Up

Bitcoin BTC$95,563.10 and ether ETH$3,209.59 remain in bearish territory after a bruising weekend took both assets to multimonth lows of $93,400 and $3,050.

The sell-off acted as confirmation of a downtrend with a series of lower highs and lower lows now being present across several timeframes.

If BTC falls to $92,840, that would trigger a $62 million pocket of liquidations, which would likely bring the price tumbling to around $87,500 — a level of support that dates back to March.

The backdrop behind the recent plunge has been a shift in expectations around the Federal Reserve’s interest-rate cutting cycle, with odds now standing at 50% for a reduction in December.

Cutting rates is seen as favorable to risk assets like bitcoin and ether as it makes holding the dollar less profitable.

Derivatives positioning

• Capital continues to leave the crypto market as indicated by the continued slide in open interest (OI) in futures tied to most major tokens, including BTC and ETH, in the past 24 hours.
• OI in ZEC and LTC futures has dropped by over 6% and 10%, respectively.
• XRP and ADA are the only coins with an OI increase of just over 1% in 24 hours.
• The Deribit-listed BTC options market continues to show a bias for puts, reflecting a downside outlook, with volatility at the front-end climbing above an annualized 50%. ETH options also display a bearish mood.
• BTC iron condor and strangle strategies dominated block flows on Deribit. In ETH’s case, call calendar spreads accounted for over 50% of the flow.

Token talk

• The altcoin market has been subdued over the past 24 hours after a violent sell-off on Friday extended into the weekend.
• Several of the larger tokens staged muted recoveries on Sunday, paving the way to marginal gains over 24 hours , although most remain down by more than 10% over the past week.
• An absence of liquidity spurred last week’s drawdown, resulting in inflated moves to the downside. Solana SOL$142.28 dropped to a five-month low of $135 while ether ETH$3,209.59 traded a tick above $3,000, eroding all gains since July.
• Even privacy coins have cooled despite a monthslong rally that saw zcash ZEC$682.96 rocket to $670 from $41.
• The bearish price action across the altcoin market is demonstrated by the fear and greed index, which is flashing “extreme fear” at 17/100, its lowest since April.
• CoinGlass’s average relative strength index (RSI) indicator is in the neutral zone at 43.52/100, suggesting that the market is not quite in oversold territory despite most tokens suffering losses over the past month.