Crypto Markets Today: Bitcoin Underperforms Ether, Broader Market

Even though bitcoin (BTC) has bounced from earlier in the European day, it's still up less than 1% in the past 24 hours. With the end of August in touching distance, the largest cryptocurrency seems set to close the month in the red, as it has done for the past three years.

Still, that's the best August return since 2021, and there are signs in the options market that gains may be coming before the month-end expiry.

Bitcoin and ether options worth over $14.6 billion are set to expire Friday with the “max pain” level at $116,000. Max pain is the strike price at which the largest number of options expire worthless, generally causing the greatest financial pain to option holders and greatest benefit to options sellers. That's above the current price, so sellers have an incentive to push BTC higher toward that level to minimize their costs.

The CoinDesk 20 Index, a measure of the broader market, has added 3.2% in the past 24 hours and the CoinDesk 80, which encompasses a large swathe of smaller tokens, rose 4%.

For the longer term, bitcoin's 200-day moving average has just crossed above $100,000. BTC has been trading above the 200-day level since the end of April, underscoring the strength of its long-term uptrend.

The 200-day moving average is a long-term trend indicator that smooths price action over roughly six months, helping investors distinguish between bullish and bearish market conditions.

Derivatives Positioning

• Bitcoin open interest (OI) across top derivatives venues has started to slip, which is in line with the downward price action over the past few days, implying traders are actively exiting their leveraged positions.
• BTC OI now stands at $30.3 billion, just shy of the all time high at $32.6 billion, Velo data shows. Three-month annualized basis is still rising, and is currently 8%- 9% across all exchanges, implying that the basis trade is still profitable.
• In options, bitcoin's upward-sloping implied volatility curve suggests the market expects long-term volatility to be higher than short-term, while other metrics point to a more immediate bearish outlook.
• Specifically, the recent move of the 25 delta skew into negative territory for near-term maturities indicates a clear shift in market sentiment, with traders paying a premium for puts over calls to gain downside protection.
• The bearish sentiment is confirmed by the 24-hour put/call volume, which shows a significant skew towards puts, another sign traders are actively hedging against or speculating on a price decline.
• Funding rate APRs across major perpetual swap venues are starting to bounce back at around 8%-10% annualized, according to Velo data.
• BTC annualized funding on Binance turned negative (-0.39%) for a short period today before bouncing back to around 10%. This indicates that while there may have been pockets of bearish sentiment, the overall market trend is starting to be more supportive by traders willing to pay a premium to bet on a price increase.
• Coinglass data shows $266 million in 24 hour liquidations, skewed 58% towards shorts. ETH ($99 million), BTC ($47 million) and SOL ($20 million) were the leaders in terms of notional liquidations. The Binance liquidation heatmap indicates $111,593 as a core liquidation level to monitor in case of a price rise.

Token Talk

• Cronos (CRO) defied Tuesday's bearish crypto sentiment, rallying more than 56% after Crypto.com and Trump Media (DJT) said they planned to create a $6.4 billion CRO treasury company.
• Crypto treasury announcements have occurred almost daily over the past month as companies begin to adopt and adapt the approach pioneered by Michael Saylor's Strategy (MSTR).
• Still, the price action often fails to match what might be perceived as a bullish event. When Verb Technology Co. (VERB) announced a $558 million private placement to establish a toncoin (TON) treasury, TON almost immediately fell by around 10%.
• This CRO deal is different. Firstly it is tied to Trump Media, a company linked to President Donald Trump, but secondly — and arguably more importantly — it gives a use case to the cronos token that was previously used predominately as an exchange token for Crypto.com.
• The deal includes the creation of a new rewards system on Truth Social that will allow users to convert the platform's “gems” into CRO tokens, with further plans to enable subscription payments and discounted services using CRO.
• Bloomberg noted that Crypto.com CEO Kris Marszalek donated $1 million to Trump's inaugural committee and also visited Trump's Mar-a-Lago home after the election victory.
• CRO currently trades at $0.225 despite being down at $0.141 last week, the news lifted 24 hour trading volume up by 1,300% to more than $1 billion as it became a market outlier while bitcoin and ether languished near critical levels of support.