Altcoins surge as dollar weakens, bitcoin holds firm

Altcoins rallied as the U.S. dollar slid to a multi-year low, while bitcoin traded sideways and ether eased modestly.

The Dollar Index (DXY) fell to a four-year low on Tuesday, breaking decisively below a trendline in place since 2011. The move came despite attempts by President Donald Trump to calm markets, saying the dollar was “doing great” and that he was not “concerned.”

Bitcoin traded little changed on Wednesday after posting gains a day earlier alongside the dollar’s decline. Ether pared some of its recent advance, while strength rotated into other parts of the altcoin market.

Hyperliquid’s HYPE token extended its rally, rising 11% since midnight UTC. Solana-based liquid staking token Jito (JTO) surged 32%, marking its largest single-day gain since December 2023, according to CoinDesk data.

Dollar weakness has historically been supportive for crypto markets, where most assets are priced against the U.S. currency. The inverse relationship was especially evident during the last bear market, when the dollar climbed roughly 22% between November 2021 and October 2022 while bitcoin fell more than 70%.

Derivatives positioning

Liquidations continued to weigh on leveraged traders, with an additional $230 million in bullish crypto futures positions wiped out over the past 24 hours. The steady clearing of long positions has persisted since Monday.

Despite that, implied volatility remains subdued. One-day and 30-day volatility measures for bitcoin and ether are under pressure, suggesting traders are not positioning for sharp price swings even as the Federal Reserve’s interest-rate decision approaches.

Open interest in futures tied to the HYPE token jumped more than 20% in dollar terms over the past day. That increase largely reflects price appreciation, as open interest measured in HYPE tokens remains stable near 57 million.

Open interest in bitcoin, ether, XRP and BNB futures rose between 2% and 4%. With the exception of ZEC and TRX, annualized funding rates across major tokens remain positive, signaling a continued bias toward bullish positioning.

In options markets, puts on Deribit continue to trade at a premium to calls for both bitcoin and ether. Demand has increased for bitcoin put options at the $85,000 strike, pointing to rising interest in downside protection. Block trades in bitcoin options were mixed, with activity in both put and call spreads, while ether traders showed demand for straddles and risk reversals.

Token talk

While HYPE and JTO were among Wednesday’s strongest performers, the largest gain belonged to PIPPIN, a Solana-based memecoin and autonomous AI agent created by AI innovator Yohei Nakajima. The token jumped 64% over the past 24 hours and was the most purchased asset by “smart money” wallets, according to Stalkchain.

Other decentralized exchange tokens also advanced. Jupiter (JUP) rose 3.1% since midnight UTC, extending its 24-hour gain to 10.9%, while Aster (ASTER) climbed 5.7% since Tuesday morning to trade around $0.69.

Broader market indexes point to continued altcoin strength. The bitcoin-heavy CoinDesk 20 Index rose 2.47% over the past 24 hours and is up 2.38% year to date. The altcoin-focused CoinDesk 80 Index outperformed, gaining 3.7% in the past day and 7.3% since Jan. 1.

The upbeat tone across altcoins comes as bitcoin remains locked in a narrow trading range—a setup that has historically favored altcoins, as capital often rotates into higher-risk assets while traders wait for bitcoin to make a decisive directional move.

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