Bitcoin dropped below $84,000 as a jump in oil prices added pressure to crypto markets, with losses widening across altcoins and liquidations climbing sharply.
BTC slipped below the $84,000 mark shortly after midnight UTC after Iran intensified attacks on tankers in the Strait of Hormuz. Brent crude moved above $101 a barrel, while U.S. Treasury yields and the dollar also strengthened.
The broader crypto market saw steeper losses. The CoinDesk 80 index fell nearly 4% over the previous 24 hours, compared with a 2.5% decline in the CoinDesk 5. DeFi tokens lost almost 6%, while the Memecoin Index dropped about 5%. SAND, PUMP and STX were among the limited number of tokens trading higher since midnight UTC.
CoinGlass data showed total crypto liquidations jumping 235% to $547 million over 24 hours. Ether positions made up $174 million of the total, with ETH trading near $2,600 after falling 3.5% since midnight.
U.S. spot bitcoin ETFs had continued attracting money before the sell-off. The funds recorded $119 million in inflows Tuesday, according to SoSoValue, marking their fourth positive session in the past five.
Rate Outlook
The Federal Reserve will release minutes from its September meeting later Wednesday. The central bank raised rates by 25 basis points at the meeting, while subsequent weaker employment data has made another increase this month less likely, according to LVRG Research chief analyst Dan Khus.
Traders will examine the minutes for signs of whether policymakers are leaning toward patience or still considering another rate increase before the end of the year, Khus told CoinDesk.
Derivatives Positioning
Futures trading remained active as traders adjusted positions. Volume increased 16% to $182.85 billion over 24 hours, while open interest edged down 1% to $152.60 billion. Liquidations rose 216% to $548 million, and shorts represented more than 52% of taker volume. The combination of higher volume, stable OI and selling-heavy flows points to repositioning rather than a fresh wave of bullish leverage.
Bitcoin futures OI climbed to 660,000 BTC from the 626,000 BTC recorded Sept. 30, an 11-month low. However, the figure remains below the record 800,000 BTC reached earlier this year, indicating that leveraged bullish positioning has yet to return strongly.
Whale positioning also remains mixed. CoinGlass data shows large traders on Binance leaning bullish on BTC, while those on OKX are bearish to neutral. On Binance, whale positioning is bearish for ETH, SOL and XRP.
Ether futures open interest rose to 13.22 million ETH from 12.5 million a day earlier. If the increase holds, it would put OI above the downtrend line extending from the May peak of about 15.95 million ETH, potentially signaling renewed interest in ether derivatives.
STX was one of the few bright spots, rising nearly 6% among the top 100 cryptocurrencies. Its futures OI increased 3%, suggesting fresh long exposure as price and OI moved higher. AVAX and DOT also posted notable increases in OI.
Funding rates for major cryptocurrencies including bitcoin and ether turned slightly negative, meaning shorts were paying longs. Negative 24-hour cumulative volume delta across major tokens also showed sellers were more aggressive in executing market orders.
Despite the sell-off, crypto volatility remained relatively subdued. Bitcoin and ether 30-day implied volatility indexes were near their yearly lows, as was Wall Street’s VIX, even as volatility in the bond market increased. Low implied volatility has also kept options relatively inexpensive for traders seeking hedges.
Bitcoin options traders continued to favor upside exposure. On Deribit, calls with strikes above $80,000 accounted for a large share of 24-hour trading volume, while skew remained broadly neutral. Ether options showed a similar setup.
Altcoin Losses
Ethereum Layer-2 tokens came under particular pressure after CoinDesk reported that Pudgy Penguins’ Abstract had become the second Layer-2 network to shut down within a week.
Optimism fell 10% over 24 hours, making it the weakest performer in the CoinDesk 100. Mantle declined close to 10%, while Arbitrum dropped about 7%. PENGU, the token associated with Abstract’s parent project, fell more than 7%.
SOL declined roughly 1%, holding up better than many major tokens, although several Solana-based assets posted steeper losses. Jito fell nearly 8%, while Jupiter dropped 6%.
ADA lost 7.5% over 24 hours to trade near 26 cents, retreating from Monday’s move above 27 cents, its highest level since May. The decline came despite Cardano introducing features that allow token issuers to freeze, seize and restrict assets.
Uniswap fell nearly 9%, Lido lost 8%, and PancakeSwap and Pendle each declined close to 8%.
SAND bucked the broader market, climbing 9% over 24 hours to lead the CoinDesk 100. The token had gained 37% on Oct. 2. STX added 4%, while Monero rose about 1%, leaving them among the few major tokens in positive territory.
