Bitcoin climbed back above $81,400 as Asian semiconductor stocks rallied, while the frog-themed memecoin Pepe gained 9%.
Bitcoin (BTC) advanced approximately 0.8% from midnight UTC to around $81,400 on Monday, recovering after a previous decline below $80,000. Other major cryptocurrencies also moved higher, with Ether (ETH) rising 0.9% and the CoinDesk Memecoin Index gaining 1.3%.
Asian Chip Stocks Lead AI Market Recovery
Semiconductor shares in Asia spearheaded a rebound in artificial intelligence stocks. South Korea’s Kospi surged 6.6%, while SK Hynix shares climbed around 11% after the company reported a sevenfold increase in profit. Nasdaq-100 futures also rose 0.5%.
Fed Rate Decision in Focus
The Federal Reserve was scheduled to announce its latest interest-rate decision at 18:00 UTC. Data from CME’s FedWatch tool indicated approximately a 92% probability that policymakers would leave rates unchanged.
Investors were also watching Fed Chair Kevin Wash’s press conference for signals about whether further rate increases could be considered.
U.S. spot Bitcoin ETFs recorded $176 million in inflows on Tuesday, marking their second consecutive day of positive flows. Meanwhile, Alphabet (GOOG) and Microsoft (MSFT) were set to publish their earnings after the U.S. market closed.
Derivatives Positioning
Futures trading activity increases: Cryptocurrency futures volume rose 7.5% over 24 hours to $163.2 billion, while open interest increased by only 1.3%. This suggests trading activity intensified without a comparable expansion in outstanding positions. Liquidations climbed 38% to $183.6 million. Taker activity was nearly balanced, with buyers accounting for 50.7% and sellers 49.3%.
Bitcoin and Ether advance without significant leverage growth: BTC gained 2.3%, even as its open interest slipped 0.1%, suggesting the price increase was not accompanied by fresh leveraged exposure. ETH rose 2.7%, while its open interest increased 1.7%, also trailing its price gain. Funding rates remained modestly positive at 0.0090% for BTC and 0.0079% for ETH, close to the 0.01% benchmark and indicating limited signs of overcrowded positions. Bitcoin and Ether recorded the largest liquidations, at $56.4 million and $46 million, respectively, accounting for more than half of the market total.
Zcash attracts fresh capital: Zcash (ZEC) recorded a 14% increase in open interest alongside a 6.3% price gain, making it one of the clearest examples of rising capital participation among major cryptocurrencies. Its funding rate stood at 0.0076%, suggesting the buildup had not become excessively leveraged. ZEC liquidations reached $8.6 million, the highest among altcoins.
Gold futures show diverging trends: Open interest in XAU futures dropped 10% despite a 1.4% price increase, pointing to capital leaving the market. By contrast, open interest in XAUT, Tether’s tokenized gold product, climbed 11.6% as its price rose 1.3%, indicating an increase in market participation.
Crude oil traders favor bearish positions: Open interest in the front-month crude oil contract, CL, rose 3.3% while prices declined 0.7%. Trading volume surged 26%, and the funding rate fell to -0.0135%, the most negative reading among the largest contracts. These signals suggest perpetual futures traders were leaning toward short positions.
Chip rally outpaces new positioning: The three-times leveraged semiconductor ETF SOXL surged 12%, but its open interest increased just 2%. SK Hynix gained 8.7% as open interest rose 3.9%, while SanDisk advanced 7.1% even as its open interest fell 1.8%. The price moves therefore exceeded the growth in new market exposure. Funding rates were slightly negative for SOXL and SK Hynix and close to neutral for SanDisk, suggesting the rally was not fueled by heavily crowded long positions.
Buying pressure remains positive across most tokens: Open-interest-adjusted cumulative volume delta (CVD) was positive for most cryptocurrencies over the previous 24 hours. This indicates market buy orders generally outweighed sell orders relative to open interest. XLM recorded the strongest positive reading, while XAUT sat at the negative end of the scale.
Bitcoin options show reduced demand for downside protection: On Deribit, Bitcoin’s one-week put-call skew fell below 1%, down from nearly 10% a week earlier. The decline suggests traders’ demand for protective put options has eased. However, one-, three- and six-month skews continued to favor puts, indicating lingering longer-term caution. Bitcoin’s most-traded options contract over the previous 24 hours was the $65,000 put expiring October 30. For Ether, the $3,400 call expiring October 29 was the most actively traded contract.
Token Performance
Pepe (PEPE), an Ethereum-based frog-themed memecoin, jumped 9.4% on Wednesday, leading the CoinDesk 100 Index. The rally followed a report from Arkham Intelligence identifying wallets associated with Tron founder Justin Sun as holding approximately $51 million worth of PEPE, potentially making him the token’s largest holder outside exchanges.
Other memecoins also posted gains. Floki (FLOKI) rose 3.4%, while Dogecoin (DOGE) advanced 1.9%.
AI-related tokens, however, failed to follow the recovery in AI equities for a second consecutive day. Venice (VVV), the token linked to a privacy-focused AI platform, dropped 8.2%. Grass (GRASS) declined 3.3%, while Kite (KITE) lost 2.4%.
Decentralized finance tokens also underperformed. CoinDesk’s DeFi Index (DFX) gained just 0.6%, compared with a 0.9% increase in the CoinDesk 80, making it the weakest performer among CoinDesk’s indexes.
Meanwhile, CoinMarketCap’s Altcoin Season Index increased to 60 out of 100, up from 57 on Tuesday.
