Bitcoin’s Brief Rally Fizzles as Long-Term Sentiment Turns Bearish; DOGE, XRP, and SOL Follow Suit
Bitcoin’s late Wednesday surge to $144,700 proved short-lived as a key long-term sentiment indicator shifted to bearish territory for the first time since June 2023. Following Bitcoin’s lead, Dogecoin (DOGE), XRP, and Solana (SOL) also saw declines, while ether (ETH) held up more firmly.
Despite the pullback, the CoinDesk 20 Index rose about 0.7% over the past 24 hours, with the broader CoinDesk 80 Index up 0.4%. Analysts remain optimistic about bitcoin’s long-term potential.
Jag Kooner, Bitfinex’s head of derivatives, noted, “Donald Trump’s endorsement of crypto inclusion in 401(k) plans offers a structural boost. Though it will take time, this may shift investor focus from speculation toward strategic pension allocations, further integrating crypto into mainstream U.S. markets.”
Market Derivatives and Positioning
Open interest in bitcoin and ether futures plateaued above 700,000 BTC and 14.2 million ETH respectively, reflecting sideways price action ahead of the Jackson Hole meeting.
LINK futures remain near record open interest highs, with token prices rising to nearly $27—the highest since January. Other top tokens, excluding BNB, saw declines in open interest over the past 24 hours.
HYPE leads major cryptos with annualized funding rates exceeding 25%, indicating growing bullish sentiment.
On the CME, bitcoin futures’ three-month premium narrowed to about 7%, signaling cooling momentum. Meanwhile, ether futures continue expanding open interest, nearing 2 million ETH, highlighting institutional appetite favoring ETH.
At Deribit, the 180-day bitcoin options skew dropped to -0.42, the strongest demand for downside protection since June 2023. Longer-dated ether options still favored calls.
Paradigm’s OTC market showed increased demand for bitcoin puts funded by selling calls, alongside mixed ether options activity.
Bitcoin and ether volatility indexes remain steady around 36% and 70%, respectively, indicating the market expects limited price swings from Jackson Hole.
Ye’s YZY Memecoin Stuns Then Stumbles
YZY Money, a new Solana memecoin linked to Ye (formerly Kanye West), skyrocketed 6,800% at launch before quickly dropping below $1. Early posts on Ye’s X account sparked hack fears but were followed by a video that appeared to confirm the token, though its authenticity is unclear.
YZY’s tokenomics resemble the TRUMP coin: 70% allocated to Ye, 10% for liquidity, and 20% for public sale. Sources said Ye initially sought 80% but agreed to 70%.
Blockchain analytics revealed insider trading: wallet 6MNWV8 purchased $450K at $0.35 per token, then sold part for $1.39 million, netting over $1.5 million including unrealized gains. Another whale invested $2.28 million and currently holds $6 million in profits.
Liquidity was seeded single-sided with YZY only, enabling large holders to extract liquidity freely—a controversial design likened to Argentina’s LIBRA token fiasco.
Retail investors bore losses; one wallet lost nearly $500K buying at $1.56 and selling at $1.06 within hours. This episode underscores the dangers of insider-heavy distributions and liquidity mechanisms despite early hype that briefly pushed YZY’s market cap close to $3 billion.
Wormhole Challenges LayerZero’s Stargate Bid
Wormhole has entered the acquisition race, proposing a bid higher than LayerZero’s $110 million offer for Stargate and requesting a five-day delay of the governance vote for due diligence.
Stargate’s appeal includes $4 billion processed in July, $345 million in total value locked, and a treasury with $92 million in stablecoins and ether, plus $55 million in STG and other assets.
LayerZero’s offer involves transferring treasury and future revenue control, but critics argue it undervalues Stargate and shortchanges token holders.
Wormhole insists STG holders “deserve a competitive process” and claims its bid offers superior long-term value.
A Wormhole-Stargate merger would unite Stargate’s liquidity pools with Wormhole’s extensive cross-chain integrations, forming one of crypto’s largest interoperability hubs.
The Wormhole Foundation believes this union would unlock significant value and deliver lasting benefits to both STG and Wormhole token holders.
