Bitcoin traded below $80,000 on Tuesday as cryptocurrency markets failed to follow gains in Asian technology stocks. BTC declined 0.4% from midnight UTC to approximately $79,700, while Ether slipped 0.5% to around $2,323. The CoinDesk DeFi Index fell 1.8%, marking the biggest decline among CoinDesk’s market indexes and reversing its outperformance from Monday.
U.S. stock futures edged lower ahead of earnings reports from major technology companies later this week. In Asia, South Korea’s Kospi climbed 3.1%, but the strength in technology shares did not translate into gains for crypto assets. Oil prices also advanced, pushing U.S. crude toward $102 per barrel.
The Federal Reserve’s two-day policy meeting begins Tuesday, with the rate decision due Wednesday. CME FedWatch data indicated roughly a 90% chance that the central bank would leave interest rates unchanged. Traders are also watching for signals about the possibility of another rate increase before year-end.
On the institutional side, U.S. spot Bitcoin ETFs recorded $110 million in net inflows on Monday, according to Farside Investors. The return of buying ended two consecutive sessions of withdrawals.
Crypto Derivatives Activity Picks Up
Futures volume rebounds: Cryptocurrency futures trading volume increased 18% to $152 billion over 24 hours after falling in the previous session. Open interest edged up 0.95%, while liquidations declined 13% to $133 million. The taker long-short ratio stood at 49.54% versus 50.46%, reflecting a nearly balanced split between aggressive buyers and sellers.
Traders add positions as prices fall: Bitcoin and Ether each dropped around 1.1% over 24 hours, while Solana lost 1.91%. Despite the declines, futures open interest rose approximately 1% for BTC, 0.8% for ETH, and 3.6% for SOL. The increase was largest for Solana, suggesting traders continued opening positions during the pullback. Funding rates remained positive across all three assets, indicating that long positions were still paying shorts. However, Solana’s cumulative volume delta finished negative, signaling net selling through market orders.
SOXL rally appears driven by short covering: Open interest in SOXL, a contract linked to a triple-leveraged semiconductor ETF, fell 7.4% even as its perpetual contract price rose 8%. The divergence suggests the price increase was driven primarily by short positions being closed rather than fresh bullish bets. A similar, smaller move appeared in SKHYNIX, a contract tied to South Korean chipmaker SK Hynix. Its funding rate dropped to 0.0221% from 0.0516%.
Oil shorts remain dominant: Oil continued to post the only negative funding rate among the assets tracked, with the rate falling further to -0.0115% from -0.0077%. This points to a persistent bias toward short positions. Meanwhile, open interest rose 2.18% as the price gained 0.86%, indicating renewed capital inflows following the previous session’s withdrawals.
Bitcoin options reflect defensive positioning: The most-traded Bitcoin options contract over the past 24 hours was a $72,000 put expiring on Dec. 25. The other four contracts in the top five by volume were calls. However, Bitcoin’s 25-delta put-call skew remained positive across expiries, suggesting traders continued to pay for downside protection. Ether options showed a similar pattern.
Altcoins Deliver a Mixed Performance
Privacy tokens outperform the market: Dash (DASH) rose 1.8%, while Zcash (ZEC) gained 0.5%, making privacy-focused assets relative outperformers. Zcash co-founder Sean Bowe proposed ending the automatic allocation of 8% of newly issued ZEC to the network’s community grants program. He argued that its treasury, estimated at around $125 million, could support several years of spending.
DeFi assets retreat: Decentralized finance tokens gave back their previous gains. Aave (AAVE) fell 3.6%, while Sky (SKY), the token of the project previously known as MakerDAO, dropped 3.9%. Aave’s decentralized autonomous organization has not repurchased tokens since April.
AI-linked cryptocurrencies fall: Render (RENDER), which supports a decentralized GPU computing network, and The Graph (GRT), a blockchain data protocol, both declined by more than 2%. Their losses came despite the rally in Asian technology stocks.
Token unlock adds pressure: Celestia (TIA), Starknet (STRK), and Pump.fun (PUMP) each fell approximately 3%. Celestia is scheduled to unlock 5.58 million TIA tokens on Saturday, according to Tokenomist, potentially adding to concerns about new supply entering the market.
CoinMarketCap’s Altcoin Season Index increased to 57 out of 100 from 53 on Monday, indicating a modest improvement in altcoin performance relative to Bitcoin.
