Change of Character: Crypto Daybook Americas
The crypto market is in the red again, with bitcoin BTC$104,166.40 showing signs of what forex traders would term a “CHoCH,” or change of character. In this case, it’s tipping bearish.
Since October last year, bitcoin bulls have ruled the options market, piling into calls at $100K and above on Deribit, pushing those strikes to the top of the open interest leaderboard. Fast forward to today, and the change is evident.
The $95K put option has an open interest of $1.80 billion, only slightly smaller than the $1.85 billion locked in the most popular option, the $140K call. Puts at strikes $80K, $85K and $90K also carry open interest of $1.40 billion-$1.55 billion.
The change of character is a sign that the market’s attitude toward risk is evolving. It’s not just a jargon, but a tool traders use to spot potential trend reversals. In an uptrend, it happens when the price breaks below a prior swing low, signaling that the bullish march might be losing steam.
That’s precisely the case in BTC, whose spot price recently dropped below $107,250, slicing through a low from early September. The move invalidated the bullish higher highs, higher lows pattern. While bulls tried to recover today, they came up short, reinforcing the shift.
The result? BTC’s price was trading near $105,000, a 1% decline over the past 24 hours. Major altcoins, such as ether ETH$3,509.33, XRP$2.4576 and BNB BNB$980.82, registered significant losses, and the CoinDesk 20 Index dropped more than 2%.
Indexes tied to memecoins, computing and smart contract tokens ex-ether, all fell, representing broader market weakness. The DeFi Select index stood out with 6% gains, largely due to its largest component, Uniswap’s UNI token, surging 23%.
UNI’s rally occurred after the protocol founder, Hayden Adams, proposed a plan to activate protocol fees, burn UNI tokens using those fees and remove 100 million UNI from the treasury, shifting the model toward deflation.
In other key news, the U.S. Treasury Department and the IRS announced new guidelines, opening doors for Wall Street-traded crypto products to generate staking yield for investors.
In traditional markets, concerns are mounting about the slide in the share price of business-development companies like Blue Owl Capital (OWL), despite broader market strength. For some observers, this decline signals distress in the high-yield, riskiest segment of private credit. Stay alert!
BY: Omkar Godbole
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