Bitcoin steadies above $60,000 while derivatives send an unambiguous warning

The crypto market took a beating on Thursday as selling pressure and liquidations rolled through. Bitcoin tumbled to around $61,300 at 02:00 UTC before clawing its way back to as high as $64,680, recently trading around $62,500. Ether ($ETH) lost 3% since midnight UTC, now hovering around $1,750. Several altcoins saw deeper declines, with NEAR, ZEC, and JUP all shedding more than 13%.

The downside move triggered a wave of liquidations, with $1.7 billion in futures positions forcibly closed — $750 million of that attributed to bitcoin and $390 million to ether. Investors appear to be rotating out of crypto to chase the AI narrative in traditional markets, compounding geopolitical uncertainty and a market structure still nursing its wounds from October's leverage wipeout.

Derivatives positioning: Total 24-hour futures volume rose 2.9% to $305 billion, an uptick that reflects elevated but not panicked activity. More telling is open interest, which declined 8.5% to $111.4 billion, a sign that leveraged positions are being unwound rather than fresh bets being added.

Liquidations have been severe: roughly $3 billion in leveraged positions wiped out over the past two days, with the 24-hour tally alone reaching $1.7 billion. Bitcoin's open interest has pulled back to 766,000 $BTC from yesterday's record highs above 800,000 $BTC.

The decline suggests the price plunge has flushed out a significant portion of leveraged longs, and bears are not aggressively building new directional bets, at least not in $BTC.

The same dynamic holds for ether ($ETH) and $XRP.

Solana is a notable exception. Open interest in $SOL surged to a record 72.16 million tokens even as prices declined, a combination that typically signals an influx of short positions. The sentiment is understandable given $SOL dropped below its February low while $BTC, $ETH, and $XRP held above theirs.

$TRX and $ADA are also seeing open interest rise as their prices fall, suggesting similar short-side accumulation in those markets.

The broader derivatives tone confirms the bearish tilt. The 24-hour cumulative volume delta across the top 20 tokens is negative, meaning traders are selling at market prices rather than limit orders. This active, aggressive bearish participation suggests potential for deeper losses.

Implied volatility is rising in tandem. Volmex's 30-day implied volatility indexes for bitcoin (BVIV) and ether (EVIV) have surged over the past three sessions, reflecting growing demand for options-based hedging and heightened expectations of continued price swings.

Put skews have strengthened in both bitcoin and ether, signaling that investors are willing to pay a premium for downside protection. The $60,000 strike put on Deribit carries over $1 billion in notional open interest. As spot prices approach that strike, large position adjustments become increasingly likely, which could amplify volatility. The $55,000 put was the most actively traded options contract in the past 24 hours.

The message from derivatives markets is unambiguous: sentiment is bearish.

Token talk: The altcoin market underperformed crypto majors on Thursday. Even recent darling $HYPE lost 12% after hitting a record high earlier this week.

$DASH, $ENA, and $FET also fell by more than 10% since midnight UTC as the lack of liquidity in altcoin pairs reared its head again.

Market depth is typically much lower on altcoin pairs than on bitcoin or ether, so the amount of capital it takes to move prices in either direction is relatively low. Pair that with a wave of liquidations and the asset simply can't maintain the level of supply, causing exaggerated price moves to the downside.

Monero (XMR), despite being down 4% since midnight, is still in the green over 24 hours. Trading at $347, it is seemingly unperturbed by the broader market crash. Privacy coin, private flex.

Much of the altcoin trajectory will depend on bitcoin's ability to hold above $60,000. A break below that