What would a market that refuses to rally sustainably on the back of positive catalysts be called? A weak one, presumably.
Looking under the hood, there is more than one single catalyst that’s driving this market’s volatility.
Bitcoin (BTC) has retraced back to roughly where it was before the Fed Chairman Jerome Powell spoke dovishly on Friday. More losses could be in the pipeline if the support near $107,500 gives way, technical charts indicate.
Meanwhile, spot and options market flows point to a rotation into ether from bitcoin.
“BTC dominance slipped from 60% to 57% on the rotation. While still above the sub-50% levels of the 2021 altcoin season, positioning is feeding talk that whales expect ETH to outperform. If staking ETFs for ETH win approval later this year, that narrative would gain further support,” Singapore-based QCP Capital said in its daily market update.
Derivatives Positioning
- BTC and HYPE’s global futures open interest have increased by 1% and 3%, respectively, in the past 24 hours, bucking the broader trend of outflows observed in other top 10 tokens.
- Cumulative open interest in USD and USDT-denominated perpetual futures across leading exchanges such as Binance, Bybit, OKX, Deribit, and Hyperliquid remained flat on Friday despite the price rally. However, since then, open interest has risen from approximately 260,000 BTC to 282,000 BTC, indicating a “sell on rally” sentiment among traders.
- The opposite is the case in the ether market, where the OI ticked higher during Friday’s rally and has retreated with the price pullback. This pattern suggests a temporary pause in bullish momentum rather than the establishment of new short positions, indicating a bullish breather rather than a shift toward bearish sentiment.
- Speaking of funding rates, except for ADA, most tokens see positive rates, indicating a net bias for bullish long positions.
- Altcoin futures OI exploded by more than $9.2 billion in a single day on Friday, pushing the combined total tally to a new high of $61.7 billion. “Such rapid inflows highlight how altcoins are increasingly driving leverage, volatility, and fragility across digital asset markets,” Glassnode said.
- On the CME, open interest in ether options hit a notional record high of over $1 billion on Friday. This follows a record number of large holders in the futures market early this month. Ether futures OI hit a new high above 2 million ETH.
- Notional open interest in BTC options rose to $4.85 billion, the highest since April, as futures activity remained subdued.
- On Deribit, BTC options continued to show a bias for puts out to the December expiry, contradicting the post-Powell bullish sentiment in the market. In ether’s case, calls traded at a slight premium.
Token Talk
- Hyperliquid hit a new 24-hour spot volume ATH of $3.4B, powered by surging BTC and ETH deposits and trading via Hyperunit.
- This spike positioned Hyperliquid as the second-largest venue for spot BTC trading, across both centralized and decentralized platforms, with $1.5B in BTC volume alone.
- Such volume milestones improve Hyperliquid’s appeal by proving its ability to handle institutional-scale order flow.
- The platform’s architecture — built on HyperCore (Layer‑1 with HyperBFT consensus) and HyperEVM — delivers sub-second finality, high throughput, and EVM compatibility, making it highly attractive to both high-frequency traders and DeFi builders.
- Its growing volume, especially in BTC spot markets, strengthens Hyperliquid’s value proposition as a liquidity layer in DeFi, reinforcing its “AWS of liquidity” thesis driven by performance and infrastructure depth.
- Spot growth complements its perpetuals dominance—where the platform already captures 60–70% of DEX market share, delivering more on-chain revenue than even Ethereum.
- High spot volume translates into real benefits for HYPE holders — its token benefits from regular buybacks funded by trading fee flows via its Assistance Fund, tying platform usage directly to long-term token value.
Read more: Here Is Why Bitcoin’s Flash Crash May Signal Altcoin Season: Crypto Daybook Americas