Crypto markets extended their downturn over the weekend, with fading expectations for U.S. rate cuts and deteriorating liquidity accelerating the slide across major digital assets.
Bitcoin (BTC) and ether (ETH) remained on the defensive after a sharp weekend drop that pushed BTC to $93,400 and ETH to $3,050 — their lowest levels in months. The move adds to a steadily forming bearish pattern, marked by consistent lower highs and lower lows across several timeframes.
Market stress could increase further if BTC tests $92,840, a level tied to roughly $62 million in potential liquidations. A break below that threshold may open the door to a deeper decline toward $87,500, a support zone dating back to March.
The selling pressure is unfolding as traders reassess expectations for Federal Reserve rate cuts. Odds of a December reduction have narrowed to 50%, tempering risk appetite. Rate cuts are generally seen as supportive for assets like bitcoin and ether by easing dollar-forward yields.
Derivatives Market Shows More Capital Rotating Out
Derivatives data points to continued risk-off positioning. Open interest (OI) in BTC and ETH futures fell over the past 24 hours, reflecting ongoing capital outflows. ZEC and LTC futures saw even steeper pullbacks, with OI down more than 6% and 10%, respectively. The only large-cap tokens showing a modest uptick were XRP and ADA, each up just over 1%.
Options flows on Deribit further highlight bearish sentiment. BTC markets remain tilted toward puts, while front-end implied volatility climbed past 50% annualized. ETH options show similar defensive positioning.
Structured strategies dominated the session: BTC flows were led by iron condors and strangles, while ETH activity was concentrated in call calendar spreads, which made up more than half of total block-trade volume.
Altcoins Remain Weak as Low Liquidity Magnifies Drawdowns
Altcoins spent the last 24 hours attempting slight rebounds after Friday’s heavy selling spilled into the weekend, though most remain down double digits on the week.
Liquidity shortages played a major role in last week’s sharp declines. Solana (SOL) plunged to a five-month low of $135, while ether traded just above $3,000 — effectively giving back all gains accumulated since July.
Even tokens coming off strong multi-month rallies showed fatigue. Zcash (ZEC), which surged from $41 to $670 over the past few months, has cooled as broader market pressure intensified.
Sentiment indicators reflect the stress. The Fear and Greed Index sits at 17/100 — extreme fear and the lowest reading since April. CoinGlass’s average RSI sits at 43.52, signaling that despite widespread losses, markets have not yet reached oversold territory.
