Derivatives markets suggest limited momentum in bitcoin and ether, while certain altcoins are seeing stronger speculative positioning.
Bitcoin (BTC) remained mostly unchanged, gaining only 0.16% since the start of the UTC day and trading around $64,000. The subdued move came despite global equity markets reaching fresh highs, supported by optimism around artificial intelligence growth and expectations of progress toward reopening the Strait of Hormuz, which helped ease oil prices.
The MSCI All Country World Index climbed 0.4% toward another record close, while its Asia-Pacific benchmark jumped 2.2%. Australian stocks also reached new highs after the S&P 500 and Dow Jones Industrial Average finished Tuesday at record levels.
The broader CoinDesk 20 (CD20) index showed little movement, with 11 assets gaining and nine declining.
The gap between crypto and traditional markets highlights continued weakness in digital assets. U.S. spot bitcoin ETFs recorded $5.4 billion in net outflows during the first half of the year as investors shifted capital toward artificial intelligence-related opportunities.
DWF Labs said in a report that both institutional and retail appetite for crypto investments has cooled as AI has captured a larger share of investor attention and capital. The firm noted that many sectors, including crypto, have struggled to keep pace with AI-driven assets over the past year.
Market participants are now looking ahead to upcoming U.S. economic data, including employment figures and the ISM services PMI, which could provide fresh direction for markets.
Circle Internet (CRCL), the issuer of USDC, reported second-quarter revenue growth of 7% compared with the previous year. However, its $701 million revenue result missed analyst expectations, Bloomberg reported.
Galaxy Digital (GLXY) was also expected to release earnings, while Riot Platforms (RIOT) delayed its financial report for an unspecified period.
Derivatives Market Positioning
Futures sentiment remains slightly bearish:
Crypto futures traders continue to show cautious positioning, with short trades accounting for 51% of taker volume. Although sellers maintain a slight advantage, the imbalance has improved from the recent 52/48 split favoring bears.
PUMP dominates recent gains:
PUMP became the top-performing token among the 100 largest cryptocurrencies over the past 24 hours, rising 115%. The rally drove higher futures activity, with open interest increasing 9% to 84.76 billion tokens. However, overall positioning remains within previously seen levels rather than marking a new market peak.
Changes in open interest:
XLM, ZEC, and BNB recorded the largest increases in open interest, suggesting traders are adding exposure. Meanwhile, SHIB, HBAR, and LTC saw declines, potentially indicating capital leaving those markets. Bitcoin and ether futures activity remained relatively quiet.
Altcoin buyers show stronger conviction:
ZEC and bitcoin posted positive open-interest-adjusted cumulative volume delta over the past day, indicating more aggressive buying activity. Traders appear to be using market orders to establish long positions rather than waiting for lower entry prices through limit orders. XLM and DOGE showed weaker buying pressure.
XLM reflects bearish sentiment:
XLM recorded an annualized perpetual funding rate of -23%, showing that perpetual contracts are trading at a discount to spot prices. This points to growing bearish positioning among derivatives traders.
Bitcoin volatility remains low:
Bitcoin’s 30-day implied volatility index continues to hover near 36% after recently falling to historically low levels. Despite expectations of a sharp recovery, volatility has remained subdued. Ether’s volatility index, EVIV, is following a similar pattern.
Options activity stays bullish overall:
Bitcoin and ether options traded on Deribit continue to see strong demand for call options, which provide upside exposure and typically reflect bullish expectations. However, OTC trading firm Paradigm reported bearish ether risk reversals, suggesting some traders are positioning for downside protection.
Stablecoin Market Update
Tether’s USDT market capitalization has declined by $4 billion over the past 60 days, marking one of the largest contractions on record, according to CryptoQuant.
USDT supply usually expands when new money enters the crypto market, as investors convert dollars into stablecoins to purchase digital assets. A decline in supply indicates that liquidity may be leaving the market.
CryptoQuant described the current drop as a possible sign of market exhaustion, noting that previous major USDT contractions have historically occurred closer to the end of selling cycles rather than before further declines.
However, the signal remains mixed. Similar USDT supply declines in early 2023 and mid-2026 were followed by bitcoin recoveries, but the current contraction also reflects weaker demand as bitcoin has traded sideways since May.
A more convincing recovery signal would emerge if USDT supply begins increasing again. Until then, continued declines suggest that capital is still flowing out of the crypto ecosystem.
Investors should monitor the direction of USDT supply changes rather than its overall size. A move back toward zero in the 60-day supply change would indicate renewed liquidity entering the market, while further declines would suggest ongoing capital outflows.
