Crypto consolidates as volatility cools and futures markets tilt bearish

The crypto market continued to exhibit signs of choppiness on Friday, with bitcoin trading at $67,000 in the middle of a trading range that spans back to early February.

A selection of altcoins picked up during the lower liquidity Asia hours, prompting the likes of ALGO and RENDER to post double-digit gains over the past 24 hours.

But the wider picture remains the same; the crypto market is trading in a macro downtrend dating back to October, characterized by a series of lower highs nad lower lows.

U.S. equities trade flat on Friday as volatility continues to cool since Donald Trump’s comments about a potential end to the war in Iran on Monday.

Brent crude oil is trading at $109 a barrel, indicating that an end to the war is perhaps not as close as some analysts are predicting.

Derivatives Positioning

• Futures markets for Bitcoin and Ethereum remained subdued, with the extended holiday weekend keeping trading volumes thin. Open interest in both assets was largely unchanged over the past 24 hours.
• Open interest in Solana futures has climbed to over 65 million SOL, its highest level since Feb. 7. The increase, combined with negative funding rates and an OI-adjusted cumulative volume delta, suggests traders are increasingly positioning for downside, with short sellers showing greater conviction.
• Similar bearish market dynamics are present TRX and BCH.
• OI in Privacy-focused Zcash ($ZEC) futures have steadied near 1.70 million $ZEC for the third straight day. $ZEC’s CVD is also the highest among majors. This combination suggests sustained positioning with strong directional conviction, likely driven by aggressive buying pressure.
• Bitcoin’s 30-day implied volatility index has declined to 51.28%, the lowest since Feb. The market shows no signs of panic whatsoever despite geopolitical concerns and energy market volatility.
• Ether’s volatility index has slipped to 72.55%, the lowest since Feb. 26.
• On Deribit, bitcoin and ether puts continue to trade pricier than calls, indicating a bias for downside protection.
• Glassnode said that the dealer gamma exposure below $68,000, all the way down to $50,000 is negative. This means that dealers could sell in a falling market to hedge their exposure, adding to downside volatility.

Token talk

• The altcoin market has been relatively resilient to crypto’s choppy behavior this week, certain portions of the market have outperformed bitcoin and crypto majors, particularly DeFi and AI tokens.
• The DeFi Select Index (DFX) is up by 1.3% since midnight UTC, while the CoinDesk Computing Select Index (CPUS) rose by 1.5%, beating the bitcoin-heavy benchmarks likes the CoinDesk 20 (CD20), which is up by just 0.16% on Friday.
• The outperformance of certain altcoins is symptomatic of a consolidating market. When bitcoin and the majors trade flat, traders often speculate on lower liquidity altcoins. That speculation typically grinds to a halt when bitcoin is back deciding the next major market move.

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