“A sharp liquidity crunch sent bitcoin and altcoins plunging, triggering over a billion dollars in derivatives liquidations as traders brace for a potential trend reversal.”, — write: www.coindesk.com
(Midjourney/Modified by CoinDesk)
- Roughly half of the liquidations came from bitcoin positions, with the rest spread across altcoins as selling pressure built up.
- ETH dropped more than 9% over 24 hours while AAVE, JUP and SUI posted double-digit losses. Many tokens slumped to lows not seen for months.
- Zcash and Monero rallied, with ZEC now up more than 1,000% since August in a striking divergence from the broader market.
The sell-off prompted more than $1.1 billion in liquidations, about half of which occurred on bitcoin trading pairs, according to CoinGlass.
The altcoin sector performed worse, with ether ETH$3,135.92 dropping by 9% in 24 hours while a number of altcoins were dealt double-digit moves to the downside. The CoinDesk 20 Index slid 8% with even the best performing, LTC$95.95losing 3%.
Crypto’s plunge coincided with a sell-off in equities. Nasdaq futures (NQ) lost 2.95% of their value over the past 24 hours.
Liquidation heatmap (CoinGlass)
Derivatives positioningBy Omkar Godbole
- Bitcoin’s 30-day implied volatility index, BVIV, which spiked to an annualized 50%, during the Asian hours, has fallen back to 47.8% even though the spot price remains near daily lows of around $97,000.
- This suggests that despite the recent sell-off, there is no panic buying of options, indicating a more measured market response.
- Ether’s volatility indices paint a similar picture.
- Open interest (OI) in futures tied to BTC remains flat while OI in ETH, SOL, XRP, SUI, ADA, LINK, UNI and most other tokens has declined by over 5% in a sign of capital outflows.
- On the CME, ether futures’ premium has dropped to 4.26%, the lowest since April, while BTC remains relatively elevated above 5%. It’s a sign of reduced demand for ETH relative to BTC, even though the ETH price has risen against BTC.
- The market swoon boosted demand for BTC and ETH puts on Deribit. Block flows in BTC featured put spreads and risk reversals. In ETH’s case, put spreads and put diagonal calendar spreads dominated flows.
Token talkBy Oliver Knight
- The altcoin market was decimated by a low liquidity sell-off on Friday as ether ETH$3,135.92 slid more than 9% in 24 hours and tokens including aave AAVE$181.46, JUP$0.2910 and SUI$1.7824 lost more than 10%.
- More than $1.1 billion worth of derivatives positions were liquidated during the same period, $510 million of which was attributed to bitcoin, according to CoinGlass.
- Several altcoins have now fallen to multi-month lows. Aave is now trading at its lowest point since May and ETH at the lowest since July.
- The altcoin market will depend on whether bitcoin, the market’s anchor, can wrangle its way out of danger and back above the $98,000 level of support.
- Failure to do so would confirm a downtrend and potential bear market reversal from October’s high of $126,000.
- There was one glimmer of hope for altcoins: the privacy coin sector. Zcash ZEC$525.14 and monero XMR$386.16 were both in the green on Friday as they defied market pressure.
- ZEC is now up by more than 1,000% since August as investors go full circle, back to a narrative that is centered on libertarian politics over speculative gains.
ZEC/USD (TradingView)
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Ether strengthens against bitcoin, raising hopes of a bullish breakout.
- Ether shows relative strength against bitcoin.
- The ether-bitcoin ratio may be headed for a breakout.
- The XRP-bitcoin ratio awaits resolution of a multi-year consolidation.
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