The cryptocurrency market faced significant pressure as Bitcoin remained below the $80,000 mark following disappointing market reactions to U.S. inflation data. This downturn has led to substantial liquidations in leveraged positions and a notable decline in altcoin values.
Bitcoin was trading around $79,800, having dipped to $78,720 earlier in the week. The cryptocurrency has not recovered to its weekly opening price of $82,500, reflecting ongoing investor caution. The recent Producer Price Index (PPI) data indicated a 6% increase, the highest annual rate since 2022, raising concerns about inflation and its impact on risk assets.
The Altcoin Season indicator fell to 43 out of 100, down from 50 earlier in the week, signaling a shift in sentiment among crypto investors. This risk-off mood has been further underscored by the derivatives market, where liquidations surged to nearly $400 million, predominantly affecting long positions.
In the past 24 hours, futures trading volume increased by 14% to $189 million, while open interest declined by 2%, suggesting that many traders are closing positions amid heightened activity. The data revealed that Bitcoin liquidations accounted for $117 million, with $102 million attributed to long positions. This trend indicates that many investors had positioned themselves for a breakout above the 200-day moving average, which is just above $82,000.
Despite the liquidations, Bitcoin’s open interest rose slightly to 750,000 BTC from 745,000 BTC, indicating continued investment in derivatives. However, the cumulative volume delta remained negative, suggesting that selling pressure is outweighing buying interest. Ethereum’s open interest also reached a record high of 15.42 million tokens, reflecting a growing demand for leverage in a stagnant price environment.
Market indicators showed that the 24-hour cumulative volume delta for most of the top 25 cryptocurrencies remained negative, indicating persistent selling pressure. If this trend continues, it could signal further risks for altcoins, which are particularly sensitive to derivatives market dynamics. Despite the volatility, the 30-day implied volatility indexes for both Bitcoin and Ethereum remained relatively stable.
In the options market, the $75,000 strike put option for Bitcoin expiring on May 29 has become the most actively traded contract, indicating a demand for downside protection. In contrast, the majority of the top five traded contracts were call options, suggesting some investors are still betting on price increases.
Performance across various cryptocurrency indices reflected the market’s struggles. The CoinDesk Memecoin Select Index dropped over 4% since midnight UTC, while the DeFi Select Index lost 1%. The broader CoinDesk 20 index, which is heavily weighted towards Bitcoin, fell by just 0.16%. Among the 100 assets in the CoinDesk 100, 75 reported losses on Thursday, with the restaking token ETHFI leading the declines.
Despite the overall downturn, a few tokens managed to gain traction. XDC rose by 7.5%, and the humanity protocol (H) broke its recent downtrend with a 3.9% increase since midnight UTC.
Bitcoin's price remains under $80,000 amid a market downturn driven by inflation concerns and significant liquidations in leveraged positions. Altcoins also faced pressure, with many assets showing losses as investor sentiment shifts.