Bitcoin’s Late Rally Fades as Long-Term Sentiment Turns Bearish; DOGE, XRP, and SOL Follow
Bitcoin briefly climbed to $144,700 late Wednesday but the momentum quickly faded as a key indicator of long-term market sentiment turned bearish for the first time since June 2023. Other cryptocurrencies including Dogecoin (DOGE), XRP, and Solana (SOL) mirrored the downward trend, while ether (ETH) displayed comparatively stronger resilience.
Despite the pullback, the CoinDesk 20 Index posted a 0.7% gain over 24 hours, and the broader CoinDesk 80 Index added 0.4%. Market experts maintain a cautiously optimistic outlook on bitcoin’s longer-term prospects.
Jag Kooner, head of derivatives at Bitfinex, commented, “Donald Trump’s support for including crypto in 401(k) retirement plans provides a foundational boost. While its market impact will take time, this could gradually channel investments from speculative to strategic pension allocations, embedding crypto deeper into the fabric of U.S. capital markets.”
Derivatives Market and Positioning
Open interest in bitcoin and ether futures plateaued at elevated levels — surpassing 700,000 BTC and 14.2 million ETH — reflecting sideways trading ahead of the key Jackson Hole symposium for central bankers.
LINK futures remain near all-time highs in open interest, pushing token prices close to $27, their strongest since January. Meanwhile, most other top-10 tokens, excluding BNB, experienced declining open interest in the past 24 hours.
HYPE token leads the major cryptocurrencies with annualized funding rates exceeding 25%, signaling increasing bullish positioning among traders.
On the CME, bitcoin futures’ recovery lost steam, with the three-month premium dropping to roughly 7%. Conversely, ether futures continue to gain traction, nearing 2 million ETH in open interest, highlighting growing institutional favor for ether over bitcoin.
Deribit data shows the 180-day bitcoin options skew dipping to -0.42 — the most significant demand for downside protection since mid-2023 — while longer-dated ether options lean toward calls.
Over-the-counter flows via Paradigm revealed growing interest in bitcoin puts financed by call selling, with mixed activity noted in ether options.
Volatility indexes for bitcoin and ether remain steady at approximately 36% and 70% respectively, suggesting that the market does not foresee major swings from the Jackson Hole event.
Spotlight on Ye’s YZY Memecoin
YZY Money, a new Solana-based memecoin tied to Ye (formerly Kanye West), launched with a meteoric 6,800% surge before plunging below $1. The initial announcement on Ye’s X account stirred fears of a hack, later quelled by a video that seemingly confirmed the token’s release — although the clip’s authenticity remains uncertain.
The token’s allocation mirrors that of the TRUMP coin, with 70% allocated to Ye, 10% for liquidity, and 20% for public sale. Sources reveal Ye initially demanded an 80% stake before settling on 70%.
Blockchain analytics exposed early insider activity: wallet 6MNWV8 spent $450,611 at $0.35 per token, later offloading part of its holdings for $1.39 million — netting a profit exceeding $1.5 million when unrealized gains are factored in. Another investor bought $2.28 million worth of YZY and now holds roughly $6 million in unrealized profits.
Liquidity was seeded single-sided, with only YZY tokens added to the pool, allowing developers or large holders to withdraw liquidity at will — a controversial structure likened to Argentina’s LIBRA token debacle.
Retail investors suffered losses; one wallet lost close to $500,000 by purchasing at $1.56 and selling at $1.06 within two hours. This case highlights the risks posed by insider-heavy allocations and liquidity design despite the initial hype, which briefly pushed YZY’s market cap near $3 billion.
Stargate Acquisition Contest Heats Up
Wormhole has challenged LayerZero’s $110 million offer to acquire Stargate, submitting plans for a higher bid and requesting a five-day postponement of the governance vote to allow token holders ample time for due diligence.
Stargate stands out with $4 billion processed in July, $345 million in total value locked, and a treasury holding $92 million in stablecoins and ether, plus $55 million in STG and other assets.
LayerZero’s proposal, which would transfer treasury control and future revenue, has been criticized for undervaluing Stargate and shortchanging its token holders.
Wormhole insists that STG holders “deserve a more competitive process” and claims its bid provides greater long-term value.
A Wormhole-Stargate merger would combine Stargate’s unified liquidity pools with Wormhole’s broad blockchain integrations, creating one of the largest cross-chain hubs in the crypto ecosystem.
The Wormhole Foundation asserts that this partnership would unlock untapped value and deliver significant benefits to both STG and Wormhole token holders over the long term.
