Bitcoin treads water as risk-off sentiment boosts gold and altcoins eye a breakout

Bitcoin and ether traded largely sideways on Friday as softer U.S. equity futures pushed investors toward a risk-off stance, while pockets of the altcoin market showed relative strength amid thin liquidity.

Bitcoin was last changing hands near $88,950, little changed on the day, while ether slipped about 1% since midnight UTC to around $2,920. Price action across major cryptocurrencies remained rangebound, mirroring weakness in U.S. stock index futures. Nasdaq 100 futures fell roughly 0.4%, while S&P 500 futures were down about 0.25% over the same period.

Risk aversion was more evident in traditional safe havens. Gold and silver extended their rallies to fresh record highs this week as investors rotated into defensive assets. The cautious mood appears linked to the first trilateral talks between Ukraine, Russia and the United States, with markets showing limited confidence that negotiations will lead to a swift resolution.

Despite the broader softness, select altcoins outperformed. LayerZero’s ZRO token jumped 12% over the past 24 hours as traders positioned ahead of a major protocol upgrade expected in early February. Tron’s TRX and Dash also gained roughly 3%, aided in part by low liquidity conditions that can amplify price moves.

Derivatives positioning

More than $200 million in crypto futures positions were liquidated over the past 24 hours, with long positions accounting for the bulk of losses. This pattern has persisted throughout the week as prices drifted lower and caught bullish traders off guard.

Bitcoin’s 30-day annualized implied volatility index (BVIV) has slipped back to 40%, reversing a brief spike to 44% earlier in the week. The decline suggests continued demand for volatility-selling strategies such as covered calls.

Ether stood out as the only top-10 token to record a modest increase in futures open interest over the past day. Other major assets, including bitcoin, XRP and solana, saw capital flow out of derivatives markets. Open interest–adjusted cumulative volume delta data showed net buying in TRX, ZEC and BCH, while bitcoin and several other markets registered net selling.

Options markets reflected growing caution around ether. On Deribit, short- and near-dated ETH put options were priced richer than comparable BTC puts, signaling relatively more bearish positioning on Ethereum. Block trading activity showed demand for BTC straddles, a volatility-focused strategy, alongside ETH put spreads.

Token talk

The “altcoin season” indicator edged higher to 29 out of 100 from 24 a week ago, suggesting traders are still searching for alpha despite subdued conditions. The bitcoin-heavy CoinDesk 20 Index slipped about 0.6% since midnight UTC, while memecoin, DeFi and metaverse sector indexes posted modest gains.

Liquidity constraints remain a key feature of the altcoin market. For example, the 2% market depth for TON stands between roughly $580,000 and $700,000, meaning relatively small orders can move the token’s $3.7 billion market capitalization by 2%. While this makes prices vulnerable to sharp swings, it also implies that any broader market rally could exaggerate upside moves due to a lack of sell-side liquidity.

Metaverse tokens remain the strongest-performing sector of the year so far. The CoinDesk Metaverse Select Index has climbed about 50% since Jan. 1, driven by gains in Axie Infinity and The Sandbox.