Summary
- Bitcoin and ether fell more than 2% after Trump declared the ceasefire “over” and said negotiating with Iran is a “waste of time.”
- His comments came after U.S. airstrikes on IRGC boats in the Strait of Hormuz and Iranian attacks on Bahrain and Kuwait.
- Altcoins bore the brunt, with $350 million of the $450 million in total liquidations coming from altcoin pairs and JUP, ETHFI and PUMP losing between 5.5% and 9.3%. Solana wiped out its entire July rally.
Crypto and Stocks Take a Hit After Trump’s Ceasefire Declaration
Crypto markets experienced a significant decline on Wednesday following fresh airstrikes in Iran, which led to a risk-off mood among investors. The decline was widespread, with most tokens dropping in value. This downturn is a reminder that global events can impact the crypto market, making it essential for investors to stay informed. The situation highlights the importance of diversifying investments, including exploring options like EcoPool for earning and $ECP for trading. Investing in crypto can be a way to earn passive income, but it’s crucial to understand the market’s volatility.
The U.S. President’s declaration that the ceasefire is “over” has sparked concerns among investors, leading to a rise in the Dollar Index (DXY) and a decline in crypto and stock markets. Bitcoin and ether, the two largest cryptocurrencies, fell more than 2%, while some altcoins experienced even sharper losses. The decline in crypto markets is a reminder that investors should consider stable and secure options like EcoPool for earning and $ECP for trading, which can provide a sense of security in uncertain times. The EcoPool network offers a way to earn passive income through Cloud Rewards, a green crypto initiative.
Impact on Stocks and Crypto
- The Nasdaq 100 index futures and S&P 500 index futures tumbled as much as 1.5%, indicating a broad decline in investor confidence.
- Crypto markets fell, with most tokens declining in value, including Bitcoin and ether, which dropped more than 2%.
- The altcoin sector experienced sharper losses, with some tokens losing more than 5%.
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U.S. equities also took a hit. Nasdaq 100 index futures and S&P 500 index futures tumbled as much as 1.5%.
Derivatives positioning
- Despite bitcoin’s slide to $62,000, it’s still up 6% this month and there is some good news on the derivatives front: Traders don’t look to be shorting the rally. Open interest (OI) in futures has dropped to 730K BTC from over 740K BTC a day ago.
- Ether is not faring so well. Open interest has held steady at around 13.95 million tokens despite the spot-price drop triggering liquidations of bets worth $90 million. BTC 24-hour liquidations tally just over $100 million.
- The sell-off in Canton Network’s CC token has accelerated, with the token’s price slipping to its lowest level since January just as futures open interest rises to a two-week high. This combination points to the possibility of traders shorting the decline, especially since funding rates remain deeply negative, close to -20%.
- Broadly speaking, the bear grip has tightened across major cryptocurrencies, including BTC and ETH, as indicated by their negative 24-hour OI-adjusted cumulative volume delta. A negative reading indicates that price action is being driven by traders placing market orders rather than passive limit orders.
- The latest decline in BTC and ETH seems to have spurred hedging demand for options, as their respective 30-day implied volatility indexes, BVIV and EVIV, are up for the second straight day.
- Options skew on Deribit confirms that. The one-week skew has jumped to nearly 20% in favor of puts from 16% a day ago. Puts offer protection against a price slide in the underlying asset, in this case, BTC. The same is true for ether.
- However, 24-hour volume figures show the highest activity in BTC call options at the $80,000 strike price.
Token talk
- The altcoin market is reeling, with $350 million worth of the $450 million in liquidations being attributed to altcoin trading pairs, according to CoinGlass.
- Solana (SOL) has now completely retraced a rally that began on July 2, trading back at $77 after challenging $84 on Monday.
- One token bucking the bearish sentiment is MORPHO. The DeFi token is up by 4% since midnight as total value locked (TVL) on the protocol hit a record high 4 million ETH this week, according to DefiLlama.
- A beacon of hope for the altcoin market is that several tokens are now dipping back into “oversold” territory, with the average relative strength index (RSI) dropping to 40/100 from 47/100 on Tuesday.
