The crypto market failed to make a meaningful recovery on Tuesday as it continued to languish in “extreme fear” territory following a sell-off on Monday that appears to have eroded investor confidence.Bitcoin traded around $87,000, down from last week’s high of $92,350 as the broader market continued to exhibit weakness despite hopes that there would be a “Santa rally” in December.The altcoin market wasn’t looking much better. Several tokens posted losses of more than 5% over the past 24 hours, led by privacy coins.Bitcoin has now retraced almost the entire Nov. 21-28 rally, underperforming U.S. equities. The Nasdaq Composite Index rose 6.6% in the same period.Derivatives positioningBTC, ETH, XRP, SOL continue to see an outflow of capital from futures market. Open interest (OI) in futures tied to these tokens has declined as much as 6% in the past 24 hours. Clearly, investor confidence stands dented due to the market’s decline and auto-deleveraging-led losses during the Oct. 8 crash.BTC’s 90-day annualized basis (the gap between futures and spot prices) has collapsed to cycle lows of around 4%-5%. Those for ether are nearing 3%-4%. Bitcoin’s 30-day implied volatility index, BVIV, is rising relative to Wall Street’s VIX index in a sign of heightened uncertainty in the crypto market. The spread between ETH and BTC 30-day implied volatility indices has shrunk to 21.50, the narrowest since May 8. The declining trend indicates expectations for more turbulence in BTC. On Deribit, put skews remain intact in BTC and ETH options. Block flows featured bias for put spread and calendar call diagonal spread strategies in BTC. In ETH’s case, traders chased risk reversals and put spreads. Token talkThe altcoin market continued to lag behind bitcoin BTC$87,434.62 on Tuesday, with ether ETH$2,827.28 and XRP$2.0415 each sliding by around 0.6% in 24 hours while BTC posted a 0.75% gain.Privacy coins were the hardest hit as zcash ZEC$329.29 extended losses with an 8% move to the downside, marking a 33% decline over the past week.Monero XMR$387.76 and dash DASH$46.74 performed almost as poorly, each losing between 5% and 6% as traders appeared to be moving on from the privacy coin boom, which now appears to have been a flash in the pan rather than a material change in trader behavior.CoinMarketCap’s “altcoin season” indicator continues to stagnate at 24/100, suggesting that preference remains with bitcoin and a select few DeFi tokens where investors can generate a yield despite the market being in decline.One of the recipients of that DeFi interest is SKY, formerly MKR, which rose by 6.7% on Tuesday after an announcement was made about token buybacks.Another narrative behind SKY’s rise has been increased interest in the related USDS token, formerly DAI, which has grown from a $7.6 billion to $9.5 billion market cap in two months.USDS is the native stablecoin of the Sky ecosystem. Investors can currently generate a yield of 4.5% through staking.
Crypto Markets Today: Risk-Off Mood Persists as Altcoins Extend Losses
