Bitcoin and Ether Gain as Traders Flock to Safety of Largest Crypto Tokens

Bitcoin ($BTC), trading at $64,597.62, has risen approximately 0.9% over the past 24 hours to reach $64,700, while the broader CoinDesk 20 (CD20) index — which tracks the performance of the largest digital assets by market capitalization — advanced just 0.16%. The strength in equity markets, which have surged to record highs, appears to have left the cryptocurrency sector largely unaffected.

Investors appear to be migrating toward the perceived safety of the largest digital assets. Bitcoin and ether ($ETH), priced at $1,903.32, are the only 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."

Ebtikar noted that altcoin open interest has declined roughly 15% over the past month, while bitcoin has gained approximately 8%. CoinMarketCap's Altcoin Season index dropped one point from Wednesday to 42/100, with readings below 50 signaling that Bitcoin is outperforming the broader altcoin 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 explained. The approval of U.S. spot Bitcoin ETFs in January 2024 opened a regulated pathway for institutional capital, embedding Bitcoin more deeply into traditional financial infrastructure — a structural shift that most altcoin projects have yet to achieve. He attributed the divergence to projects failing to clearly define how value accrues, leaving them unable to justify investor exposure during market downturns.

On the equity side, tech stocks are showing signs of weakness. The Nasdaq 100 index fell, even as the S&P 500 and Dow Jones Industrial Average rose. The decline followed Elon Musk's SpaceX (SPCX) reporting its first earnings results since going public in June. The IPO revealed a massive surge in AI-linked capital spending that investors punished, sending shares down 13% before the closing bell. The AI trade has been widely blamed for drawing capital away from the crypto sector, and a reversal could help restore enthusiasm for digital assets.

Derivatives Positioning

On a positive note, 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 remove liquidity from the order book by executing transactions at available market prices.

$BTC Open Interest Rises but Sustainability Questioned: Bitcoin's futures open interest (OI) climbed to 770K $BTC. This level has been reached several times since early June, but each previous spike proved fleeting, with OI falling back to 740K $BTC or lower the following day. A sustained increase would signal that confidence is returning and investors are again willing to take on leverage. Supporting a bullish outlook, other key metrics such as annualized perpetual funding rates and 24-hour OI-adjusted cumulative volume delta (CVD) remain positive for $BTC.

$XRP's Rising OI Amid 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 a declining price and rising OI is often interpreted as confirmation of market weakness, as it suggests new short positions are being opened. This assessment appears reasonable given that $XRP's perpetual funding rates are negative and its OI-adjusted CVD 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 Remains Lackluster, $SOL Leverage Unwinds: Ether's open interest remains subdued, staying below the 14 million $ETH threshold and showing neither improvement nor position reduction. This contrasts with $SOL futures, where OI declined for another day to 60.81 million tokens, having peaked 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 equities, including SNK, SPCX, and SKYHYNIX. These rank alongside crypto market leaders $BTC and $ETH, indicating sustained demand for trading traditional assets with crypto-style infrastructure.

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

Implied Volatility Steady: Bitcoin's 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, displayed a similar pattern.

Options Flow Shows Growing Upside Interest: In Deribit options trading, bitcoin's 24-hour volume ranking revealed increased interest in calls, or 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 heavily traded contract over the past 24 hours.

Source: CoinDesk