Bitcoin and Ether Gain as Traders Rotate Into Largest Tokens Amid Altcoin Weakness

Bitcoin is outperforming the broader cryptocurrency market as traders shift toward large-cap tokens, leaving altcoins with declining open interest and weak momentum. The two largest cryptocurrencies by market capitalization remain the only members of the CoinDesk 20 (CD20) index — a broad benchmark tracking 20 of the most liquid digital assets — in positive territory.

Derivatives data reveal a cautiously bullish tilt for bitcoin, characterized by rising futures open interest, steady implied volatility, and growing upside options bets. Meanwhile, XRP and SOL face leverage-driven downward pressure.

NEAR's new stake-to-compute model ties its token to AI computing power, but analysts caution that its long-term viability depends on sustained real demand once early incentives and subsidies diminish.

Market Overview

Bitcoin (BTC) added approximately 0.9% over the past 24 hours to reach $64,700, trading well below the all-time high near $73,700 set in March 2024. The broader CoinDesk 20 index rose just 0.16%. Record-high equity markets appear to have left the crypto sector largely unfazed.

The cryptocurrency market is exhibiting a flight to the perceived safety of its largest tokens, a rotation pattern that has historically surfaced during stretches of uncertainty within digital asset markets. Bitcoin and ether (ETH) are the sole CD20 components trading in positive territory. Zaheer Ebtikar, chief strategy officer at crypto neobank Plasma, told CoinDesk that altcoins are struggling "without aggressive support from bitcoin momentum."

Altcoin open interest has declined roughly 15% over the past month, while bitcoin has gained approximately 8%, Ebtikar noted. CoinMarketCap's Altcoin Season index dropped one point from Wednesday to 42 out of 100, with readings below 50 generally indicating that smaller tokens are underperforming bitcoin rather than leading the market.

"Because Bitcoin has moved into capital markets plumbing with ETFs, basis trading, institutional hedging, and collateral, that flow doesn't need a rally to justify itself. However, most of the altcoin market hasn't made that transition yet," Ebtikar said.

This divergence, according to Ebtikar, stems from projects failing to clearly define how value accrues, leaving them unable to justify investor exposure during market downturns.

Tech stocks are also showing signs of weakness. The Nasdaq 100 index fell, while the S&P 500 and Dow Jones Industrial Average rose. This follows Elon Musk's SpaceX (SPCX) reporting its first earnings results since going public in June. The disclosure revealed a substantial surge in AI-related capital spending, prompting investors to sell off the stock, which dropped 13% before the closing bell. The broader AI trade has been widely cited as a factor drawing capital away from the crypto sector; a reversal of that trend could reinvigorate crypto market enthusiasm.

Derivatives Positioning

Bullish tilt in taker volume: The long-short taker volume ratio for the crypto futures market turned bullish for the first time in at least a week, with longs accounting for nearly 52%. Takers are traders who execute against available prices, removing liquidity from the order book.

BTC open interest ticks up, but sustainability questioned: Bitcoin's futures open interest (OI) rose to 770,000 BTC. This level has been reached several times since early June, but each prior spike was short-lived, with OI falling back to 740,000 BTC or lower the following day. A sustained increase would signal restored confidence and greater willingness among investors to take on leverage. Other key metrics, including annualized perpetual funding rates and the 24-hour OI-adjusted cumulative volume delta (CVD), are positive for BTC, supporting a bullish outlook.

XRP's rising OI alongside falling price: XRP's open interest increased 5% over the past 24 hours to 2.23 billion tokens, while its price dropped to $1.04, the lowest since early July. The combination of falling price and rising OI is generally interpreted as confirmation of market weakness, as new leveraged short positions pile in while existing longs face pressure. This assessment appears consistent with XRP's negative perpetual funding rates and an OI-adjusted CVD that ranks among the most negative of major tokens, second only to XLM. Some traders appear to be positioning for a deeper spot price decline.

ETH stays lackluster, SOL leverage unwinds: Ether's open interest remains subdued, staying below 14 million ETH and showing neither improvement nor position reduction. This contrasts with SOL futures, where OI fell for another day to 60.81 million tokens, down from a peak above 76.5 million tokens on June 24.

Stock-tied perpetuals among most traded: Several of the most actively traded perpetual futures contracts over the past 24 hours are tied to stocks, including SNK, SPCX, and SKYHYNIX. These rank alongside crypto market leaders BTC and ETH, indicating sustained demand for trading traditional assets through crypto-native instruments.

Mixed CVD sentiment across majors: Major cryptocurrencies are showing divergent sentiment. BTC and ETH lead on positive 24-hour CVD, while SUI, XLM, DOGE, AVAX, and XRP sit on the negative side. Positive CVD indicates bulls are acting more aggressively through market orders rather than passive limit orders; negative CVD suggests the opposite.

Implied volatility steady for BTC and ETH: Bitcoin implied volatility remained unchanged from Wednesday, with the BVIV index continuing to hover near 36%, a level from which it has historically reverted upward toward its mean. The ether volatility index, EVIV, exhibits a similar pattern.

Options flow shows growing upside interest: In Deribit options, bitcoin's 24-hour volume ranking shows increased interest in calls — bullish bets — at strikes well above the current spot price, including the $96,000 and $80,000 calls. For ether, the $2,000 call was the most traded contract over the past 24 hours.

Token Talk: NEAR's Stake-to-Compute Model

NEAR traded at $1.68 on Thursday, down 1.8% over 24 hours after retreating from an intraday high of $1.73. The token carries a market capitalization of $2.19 billion, and its price has not reflected the ecosystem's push into AI compute.

The network recently launched a staking product that allows holders to lock up NEAR to provision computing power for AI applications, tying the token's utility to compute rather than governance or speculation. The launch comes amid a broader wave of projects seeking to connect blockchain networks with AI workloads, positioning crypto infrastructure as a decentralized alternative to cloud-based computing. However, the model's viability depends on whether the underlying demand is genuine, according to Leo Fan, CEO of Cysic.

"Credits aren't the same as usage," Fan said. Stake-to-compute arrangements can provide a token with a clearer economic purpose, but early activity is frequently driven by incentives, with developers participating for rewards rather than actual compute needs. The critical test is whether usage persists once incentives normalize.

Fan identified three metrics to watch: utilization (how much of the staked compute is actually being used), workload volume, and whether developers continue paying after subsidies taper. Sustained demand from AI builders would validate the model; a drop-off once rewards fade would signal it was temporary.

This assessment extends beyond NEAR. Linking a token to compute represents one of the more substantive attempts to move crypto beyond governance-and-speculation utility, but its success ultimately depends on whether the compute capacity is actually utilized. NEAR serves as a test case that others in the AI-crypto space will be closely monitoring.