BTC Price Slips, XPL, ENA Slide as AI Spending Concerns Hit U.S. Equities

Cryptocurrency prices fell in the past 24 hours, with the CoinDesk 20 Index (CD20) losing 1.7% and all members lower. Token prices were hit by a sell-off in U.S. equities after tech firms Meta (META) and Microsoft (MSFT) raised their AI investment projections, prompting overspending concerns.

Bitcoin BTC$110,001.70 was least changed among the 20 largest cryptocurrencies, dropping 0.2% to just below $110,000 on the 17th anniversary of the publication of its white paper. The next-best performer, ether ETH$3,858.85, fell 1.3% as the broader altcoin market headed into the weekend after an overall weaker seven days.

Directional cues from derivatives are mixed. Bitcoin futures show no clear trends, with funding rates little changed, open interest only slightly lower and the three-month annualized basis remaining subdued.

Options exhibited a shift toward a neutral-to-bearish sentiment in the near term, though, overall, there’s a positive structural bias with a premium being paid for short-term calls.

Derivatives Positioning

By Saksham Diwan

• The bitcoin futures market is in a state of consolidation, with no clear trend emerging.
• Open interest (OI) fell slightly to $26.16 billion, though it remains elevated.
• Funding rates across most venues are little changed, indicating low general demand. There is, however, isolated bullish demand evident on specific platforms, like Deribit, where rates spiked to an annualized 8%.
• The three-month annualized basis, meanwhile, remains subdued in the 4%-5% range, confirming that the basis trade is currently unappealing.
• In options, there is a shift toward near-term neutral-to-bearish sentiment, despite maintaining a positive structural bias. The implied volatility (IV) term structure continues to show a near-term backwardation before moving into long-term contango.
• While the one-week 25-delta skew remains positive at 8%, indicating a premium is still paid for short-term calls, this conviction is being challenged by the 24-hour put/call volume, which has flipped to a 56%-43% in favor of puts, suggesting near-term downside hedging or speculation is currently dominating trading activity.
• Coinglass data shows $879 million in 24 hour liquidations, with a 86-14 split between longs and shorts. BTC ($303 million), ETH ($193 million) and others ($79 million) were the leaders in terms of notional liquidations. The Binance liquidation heatmap indicates $111,000 as a core liquidation level to monitor, in case of a price rise.

Token Talk

By Oliver Knight

• The altcoin market is heading into the weekend lower than a week ago, with ether ETH$3,858.85 losing 1.3% at $3,840.
• Many tokens broke through key levels of support in the period, dragging the average down. The CoinDesk 80 Index, a measure of the smallest of the top 100 tokens, fell 3.8% while the CoinDesk 20 dropped 1.3%.
• Doublezero (2z), plasma XPL$0.2937, gate token (GT) and ENA$0.3895, all declined by between 15% and 21% after extending losses on Friday.
• A few tokens bucked the trend, notably in-vogue privacy coin ZEC$441.69, which is up by 5% on Friday to add to a weekly gain of 47%.
• The TRUMP memecoin also performed well after it emerged that the company behind the token plans to buy fundraising platform Republic. TRUMP rose 35% over the past seven days.
• The altcoin market outlook now depends on whether ether can cling on to its current level of support at $3,700, an area that provided three bounces in October.
• A break below that level would indicate weakness and a potential macro trend reversal, which is likely to be reflected across the entire altcoin market.