Gold’s record-breaking rally and Bitcoin’s recovery to $122K come as derivatives markets show signs of profit-taking, not panic
The dollar index’s recovery rally gathered steam early Wednesday, but that did not deter gold from climbing to new highs above $4,000.
Bitcoin, too, has recovered from Asian session lows near $121,000 to trade near $122,750 at press time. The cryptocurrency is still down 1.3% on a 24-hour basis. The CoinDesk 20 Index is down over 3% at 4,229 points. Gold tokens, XAUT and PAXG, trade higher, taking cues from the spot gold prices. Meanwhile, BNB, CAKE and HASH traded higher on a 24-hour basis.
Analysts retained bullish outlook. “The signal hasn’t changed: fade USD strength, stay long gold and BTC on dips, and brace for data-gap volatility,” Singapore-based QCP Capital, said in a market update.
Derivatives Positioning
By Omkar Godbole
- Most major tokens have experienced a drop in futures open interest (OI) over the past 24 hours, with AVAX being a notable exception, posting a 2% rise in OI.
- This widespread decline suggests that recent price falls are largely due to profit-taking rather than an increase in bearish positions.
- Perpetual funding rates remain steady at or below an annualized 10%, reflecting a mild bullish sentiment in the market.
- On the CME, ether futures open interest has decreased to 2.16 million ETH from Monday’s peak of 2.34 million. Despite this retreat, overall positioning remains relatively high, especially when compared to bitcoin’s open interest, which is still well below its December 2024 high.
- Both BTC and ETH futures premiums on the CME continue to trade under 10%.
- On Deribit, the bitcoin options market shows a slightly negative skew across all tenors, indicating puts are somewhat more expensive relative to calls. Block trades predominantly feature bull call spreads in bitcoin and outright purchases of out-of-the-money ether calls.
Token Talk
By Oliver Knight
- BNB Chain activity is continuing to dominate the altcoin sector this week; spurring a 10% daily gain for pancakeswap (CAKE) and a 3% rise for BNB despite the wider market cooling off.
- Spot trading volume on PancakeSwap hit $19 billion over the past 24 hours as traders attempt to capitalize on the latest wave of hype; Chinese-language memecoins that, in some cases, have already exploded to valuations upwards of $350 million.
- The momentum shift to BNB Chain away from the likes of Solana began following the emergence of Aster, a decentralized perpetual exchange that has regularly topped $100 billion in daily volume despite claims over trading flow disparities.
- Total value locked (TVL) on BNB Chain has increased from $6.5 billion to $9 billion since June, although it remains well below its record high of $26.3 billion set in 2021, suggesting the ecosystem has more room to grow.
- Much of the network’s growth will also depend on the direction of the wider crypto market; BTC and ETH both gave back gains on Wednesday as the market begins to consolidate following another failed breakout.
- A move to the downside would likely weigh on BNB Chain as crypto traders often minimize risk by rotating to stablecoins, reducing the demand for speculative memecoins.
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