The bearish trends that have affected major cryptocurrencies continue as most of them have slipped by as much as 8% in the last 24 hours. Tokens of Solana (SOL) and Dogecoin dipped the most among the major cryptocurrencies, even as bitcoin remained mostly unchanged over the past 24 hours.
According to data from CoinGecko, “SOL dropped by 8% and DOGE by 5%, while BNB Chain’s BNB, Cardano’s ADA, and XRP slid a relatively lesser 3.5%. Outside of the top ten, Avalanche’s AVAX slid a massive 11%, while Shiba Inu’s SHIB lost just 2.5% despite being a relatively more volatile token. Ether, amid failing demands for block space on Ethereum, dropped by 3.2%, suggesting lower development and on-chain activity.”
Glassnode, an on-chain analytics firm, said in a note earlier this week that the derivatives market suggested fear of further downside remains among investors. “With poor price performance, fearful derivatives pricing, and exceedingly lackluster demand for block-space on both bitcoin and Ethereum, we can deduce that the demand side is likely to continue seeing headwinds,” Glassnode said. The on-chain analytics firm continued by saying, “Yields on a three-month rolling basis for futures hover over around 3.1% for both assets, which is historically very low.”
However, lower yields give traders little reason to deploy capital and enter markets, which could mean further downside as new capital fails to bid up spot and futures prices. The capital could re-enter if broader markets provide low returns.
As reported earlier this week, the bearish futures data came alongside options activity on bitcoin that suggested a bearish sentiment among traders. Put options are contracts that give the option buyer the right but not the obligation, to sell a specified amount of an underlying asset at a given price. On the other hand, call options allow call buyers to purchase the asset at a predetermined price in the future. The put/call ratio on bitcoin options reached 12-month-highs of over 0.72, indicating traders were hedging their portfolios against a move downwards.
The put/call ratio measures put against calls, which indicates how traders are positioning for a market move. Current conditions remain bearish, with bitcoin trading between $28,700 and $30,500 this past week, its longest downside in history.
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