The crypto market has dragged itself upward following last week’s sell-off that saw BTC and ETH test major levels of support.
BTC now trades around $111,000 while ether is back above $4,000. There are also slivers of strength in the altcoin market; with LINK rising by 14% and FLOKI notching a 27% gain over the past 24 hours.
Sentiment is improving after last week’s liquidation cascade that temporarily wiped $500 billion off the crypto market. However, BTC and ETH both need to remain above their respective levels of support at $110,000 and $4,000 to avoid continuation of the trend to the downside, which could accelerate as liquidity is low compared to earlier this month.
Derivatives Positioning
- BTC options positioning remains firmly bullish, with a put-call open-interest ratio of 0.66 and a large build-up at the $140K strike, where over $2.4B in notional call exposure is concentrated. This indicates traders are continuing to price in upside momentum into year-end, even as spot volatility rises.
- Total open interest on bitcoin Deribit options has climbed to 427,746 contracts, marking a yearly high. The Dec. 26 expiry dominates ($14.3B notional), suggesting traders are extending bullish bets further out the curve while keeping tactical flexibility in shorter-dated options.
- ETH options show similar positioning, with call dominance around the $4K–$4.5K strikes and rising open interest into late December expiries, mirroring BTC’s structure.
Token Talk
By Oliver Knight
- An increase in value across several altcoins, notably popular memecoin floki, resulted in an improvement in sentiment across the crypto market on Monday, although CoinMarketCap’s altcoin season index remains at 26/100, indicating investor preference for bitcoin over speculative plays.
- Bitcoin dominance, a metric used to assess how much of crypto’s total market cap can be attributed to BTC, is at 58.8%, an increase from this time last month when it was at 57.2%.
- While there were signs of recovery on Monday, several altcoins are still significantly lower than they were a week ago. Synthetix is down by 30%, with others including FET, ASTER and BNB all facing losses of between 15% and 25%.
- One of the drivers of positive sentiment on Monday was LINK, which rose by 14% after a series of wallets collectively withdrew $116 million worth of tokens from Binance, indicating accumulation following last week’s crash.
- The average crypto relative strength index (RSI) is at 54.2/100, suggesting that the market is in a state of limbo as it distances itself from key levels of support but remains far off challenging major levels of resistance.
