What to Know:
- Bitcoin experienced a “sell the news” reaction following the Federal Reserve’s interest-rate cut and a U.S.-China trade deal.
- Despite the market downturn, Bitcoin futures data indicates underlying resilience and diminished volatility.
- Altcoins show mixed performance, with some outperforming Bitcoin, while others face significant losses.
The crypto market saw a dip as Bitcoin pulled back to the $110,000 support level after traders reacted to news of the Federal Reserve’s interest-rate cut and a U.S.-China trade agreement. Investors are now watching closely to see if Bitcoin can avoid forming a downtrend by surpassing its recent high of just under $116,000, which remains below the all-time high of $126,000. This period is crucial for gauging market sentiment and potential future movements.
Despite the price drop, the Bitcoin futures market shows signs of strength. Open interest has slightly increased to $27.2 billion, suggesting minimal liquidations and quick re-entry by buyers. Funding rates have also normalized, trending neutral across most venues, indicating a more stable market sentiment compared to previous volatility.
The Bitcoin options market maintains a bullish outlook, though short-term conviction has tempered somewhat. Implied volatility still shows near-term backwardation before transitioning to long-term contango. The one-week 25-delta skew has decreased from 10% to 8%, but traders are still willing to pay a premium for short-term call options.
Altcoin performance has been varied, with Bitcoin dominance slightly decreasing from 59.3% to 59.0%. While some altcoins are outperforming Bitcoin amid the sell pressure, others like XRP and XLM have struggled, experiencing notable losses. This mixed performance highlights the diverse dynamics within the altcoin market and the selective opportunities available to investors.
Source: Original article
