Bitcoin dropped below $70,000 on Thursday as a surge in energy prices and a pause in rate cuts from the Federal Reserve weighed on investor sentiment and pressured risk assets.
The leading cryptocurrency fell to around $69,600, down roughly 1.6% since midnight UTC, while Ethereum declined 1.7% to near $2,160. The move came alongside a sharp rally in energy markets, with Brent crude rising to $114 and Oman crude surging as high as $150.
European natural gas futures also spiked, climbing about 25% to above €78 per MWh after Iran struck key Gulf energy infrastructure following an Israeli attack on its South Pars gas field, raising concerns about global supply disruptions.
At the same time, the Fed kept interest rates unchanged in the 3.50%–3.75% range, signaling a pause in its easing cycle and strengthening the U.S. dollar. The combination of rising energy costs and tighter monetary expectations triggered a broader risk-off reaction, with Nasdaq 100 futures slipping around 0.3%.
Derivatives positioning
Crypto derivatives markets reflected the shift in sentiment. Around $600 million in leveraged positions were liquidated over the past 24 hours, with long trades accounting for most of the losses as bullish bets were caught off guard.
Futures open interest declined 5.6% to approximately $106.9 billion, pointing to reduced market participation. Ether futures saw a sharper 9% drop in open interest alongside a 6% decline in spot price, signaling capital outflows.
Futures tied to Tether Gold and Zcash also posted double-digit declines, highlighting growing investor caution.
Bearish sentiment is building, with funding rates turning negative across major tokens including BTC, ETH, BNB, and SOL. The 24-hour cumulative volume delta has also turned negative for most assets, reinforcing the shift toward short positioning.
Volatility expectations are rising. BVIV climbed more than 5% to 58.36%, reversing a week-long decline, with a similar trend seen in ether markets. On Deribit, increased demand for put options points to heightened downside hedging.
Options flows show traders leaning into volatility strategies, with strong demand for ether straddles, while bitcoin traders favored risk reversals and put spreads.
Token moves
Altcoins came under heavier pressure. Bittensor dropped 8.8%, while Hyperliquid fell 6.5%, reflecting thin liquidity conditions following October’s $19 billion leverage wipeout.
A handful of tokens bucked the broader trend. NEO gained 4.2%, while restaking token Ether.fi added 1.5% to trade near $0.55.
Broader market gauges also weakened. The CoinDesk 20 Index fell about 1%, while the DeFi Select Index and CoinDesk Memecoin Index declined 1.4% and 2%, respectively, underscoring widespread selling across digital assets.
