Cryptocurrency traders were in high spirits Thursday as Bitcoin’s price surged past $119,000, aiming for a new all-time peak.
The alternative cryptocurrency market also experienced a boost, with various tokens seeing notable increases. Specifically, and showed gains in the double digits, while extended Wednesday’s climb, jumping 58% in the last day to a price of $143.
This surge in crypto markets stemmed from several factors, including increased investment flowing into Exchange Traded Funds (ETFs), the rising price of gold, and an overall positive market outlook for risk-based investments.
Derivatives Market Insights
- The Bitcoin futures market demonstrates a robust and ongoing bullish trend, with critical indicators reaching unprecedented levels. The total value of open contracts has hit an all-time high of $32.6 billion, signifying a substantial increase in trader participation, with Binance leading this surge at $13.6 billion.
- This peak in open interest is bolstered by a consistent 3-month annualized basis, holding steady around 7%. This suggests that trading strategies centered on this basis remain profitable, further solidifying the positive market sentiment. The synergy between these metrics implies that the recent price movements are motivated by solid, conviction-driven bullish positions rather than fleeting speculation.
- The Bitcoin options market presents a somewhat conflicting view of market sentiment. While the 25 Delta Skew for near-term options is still declining, now at 3.25%, indicating a willingness among traders to pay more for put options as a safety net against potential declines, the 24-hour Put/Call Volume ratio paints a different picture.
- Call options continue to dominate trading volume, accounting for over 56%, suggesting that a majority of traders are actively positioning themselves to benefit from a market upswing rather than a downturn.
- Concurrently, Bitcoin’s funding rate across major exchanges is fluctuating between an annualized 9% and 10%, which demonstrates a healthy appetite for leveraged long positions.
- However, a notable exception is Deribit, where the funding rate has unexpectedly skyrocketed to over 60%. This outlier indicates intense, concentrated demand for long positions specifically on that platform. However, the overall market, including altcoins, as measured by Coinglass data of the top 30 coins by market cap, appears not to be overheating, with average funding at around 10% annualized.
Project Insight: XPL Token
By Oliver Knight
- Paulie Punt, the founder of Plasma, has denied allegations that team members have been selling the newly launched XPL token, despite data suggesting otherwise.
- Paul stated emphatically that no one on the Plasma team has sold any of their XPL holdings since its launch. He explained that all allocations for investors and the team are subject to a three-year lock-up period with an initial one-year holding period, preventing any access or sales within that timeframe. He insisted that claims of insider selling are baseless.
- The Plasma founder also contested claims that the team primarily consists of former “Blast” employees. He clarified that of the roughly 50 team members, only three previously worked at Blur or Blast. He highlighted that the team also includes professionals with experience at Google, Facebook, Square, Temasek, Goldman Sachs, and Nuvei, underlining the project’s diverse expertise.
- Another point of contention involves Wintermute, a well-known crypto trading firm frequently involved in providing market-making services for new projects. Paul denied that Plasma has engaged Wintermute for market-making or any other services, asserting that the company has no more information about Wintermute’s XPL holdings than the general public.
- ManaMoon, a pseudonymous researcher, initially claimed that over 600 million XPL tokens have been moved from the project’s designated wallet to various exchanges since the token’s launch.
- Since its introduction, XPL’s performance has been underwhelming, declining from a peak of $1.68 to $0.97, despite consistent daily trading volumes of $2.6 billion.