Crypto markets plunged toward April lows on Friday as a persistent liquidity crunch drove heightened volatility. Bitcoin (BTC $87,058.50) and Ether (ETH $2,934.13) each fell roughly 10% over 24 hours, with BTC last trading near $82,200 and ETH around $2,700.
Altcoins suffered more severe losses, with several tokens dropping as much as 20%. The CoinDesk 20 Index (CD20) fell 10%, while the CoinDesk 80 Index declined 12%, leaving all constituents in negative territory.
Liquidity and Market Pressures
The sell-off stems partly from October’s liquidity squeeze and liquidation event, which left markets thin and susceptible to sharp swings. U.S. equities also faced pressure, with the Nasdaq 100 now 9.4% below its October 31 record high.
Derivatives and Volatility Indicators
- Bitcoin’s 30-day implied volatility (BVIV) surged past 64%, while Ether’s volatility index jumped to 87%, the highest since April 10.
- Bitcoin open interest (OI) fell to 700K BTC from 752K BTC, as leveraged bullish positions were liquidated. Analysts noted some traders were “catching the falling knife” by buying futures amid the decline.
- OI across altcoins also declined, with DOGE, ENA, and ASTER down more than 15%.
- Deribit options show a strong bias toward puts, with 46% of BTC block flow in put spreads. ETH options displayed similar trends. Some traders even purchased deep out-of-the-money IBIT puts at the $15 strike.
Altcoin Market and Sentiment
Altcoins hit multimonth lows, and the Crypto Fear & Greed Index sank to 11/100, the lowest since June 2023.
While Bitcoin and Ether also dropped roughly 10%, the average crypto RSI has entered oversold territory, signaling a possible short-term relief rally.
Despite the market turmoil, some traders profited. Two traders collectively earned $1.3 million by sniping Jesse Pollak’s creator coin, JESSE, purchasing tokens in the same block as their deployment, according to Arkham Intelligence
