Bitcoin drops under $90,000 while altcoins decline amid light trading: Today's Crypto Markets

Bitcoin Retreats Below $90,000 Amid Market Volatility

Bitcoin (BTC) experienced a sharp decline, slipping under the $90,000 mark after reaching a local peak of $91,570 at 01:15 UTC. This marks its lowest point in the past five days.

This downturn comes after BTC failed for the third time to surpass the $94,500 resistance level, with previous attempts on December 4 and December 10. The current price movement closely resembles the trends observed over the last month and a half.

Currently, Bitcoin is trading within a well-established range between $85,000 and $94,500. This corridor has provided some stability following a significant drop from an all-time high of $126,220 on October 6 to $80,600 by November 21.

Alternative cryptocurrencies struggled as well, with privacy-focused Zcash (ZEC) plunging over 16% between midnight and 10:00 UTC. The token PUMP also saw a double-digit percentage loss during the same period.

U.S. stock index futures mirrored the crypto market’s weakness. The Nasdaq 100 and S&P 500 futures declined by 0.27% and 0.29% respectively since midnight, while the U.S. Dollar Index (DXY) continued its upward momentum, gaining more than 1% since December 24.

Derivatives Market Overview

• More than $400 million in leveraged crypto futures positions were liquidated over the past 24 hours, with the majority being bullish bets—suggesting a bearish tilt in leverage.
• Total open interest (OI) in crypto futures dropped to $140 billion from over $141 billion on Wednesday, which had been the highest level in nearly two months.
• Open interest in Bitcoin futures rose by 2%, accompanied by positive funding rates, indicating that some traders are buying the dip.
• Conversely, OI in ETH, SOL, XRP, ZEC, and SUI declined, pointing to capital outflows from these assets.
• Most major cryptocurrencies, except BNB, maintain positive funding rates, reflecting a dominance of bullish long positions. However, altcoins like LINK, XLM, AVAX, and CC are notable for their negative funding rates.
• On Deribit, both BTC and ETH put options continue to command a premium over calls, signaling ongoing downside sentiment. However, this put bias has weakened in short-term options compared to the previous month.
• Block trading activity reveals a strong preference for volatility strategies, such as straddles and strangles, in both Bitcoin and Ether. Ether also saw notable put spread flows.

Altcoin Performance and Market Sentiment

• Altcoins endured one of their toughest selloffs in recent weeks, with ZEC, PUMP, and DASH all experiencing declines exceeding 10%.
• The DeFi sector was the weakest performer, with its index (DFX) dropping 3.12% since midnight. The memecoin index (CDMEME) followed closely, falling 3.09%.
• The CoinDesk 20 index slipped by 2.23%, suggesting that tokens with larger market capitalizations outperformed more speculative assets.
• This underperformance is largely due to a persistent lack of liquidity and market depth in the altcoin market, following a major liquidation event in early October that wiped out $19 billion in derivatives positions.
• The liquidity shortage was especially evident on Thursday, when a $12 million long position in Zcash (ZEC) was liquidated, resulting in outsized losses due to insufficient buy orders in the market.
• ZEC’s outlook remains uncertain after several developers resigned following a governance dispute with a nonprofit organization supporting the network.
• CoinMarketCap’s altcoin season index remains firmly bearish at 23 out of 100, a significant drop from its September peak of 78.