Bitcoin and Ether Slide as Coldcard Wallet Exploit Extends Into Fifth Day

Despite the severity of the losses, the decline in crypto markets has remained relatively limited considering the scale of the Coldcard wallet breach and the potential damage to confidence in hardware-based self-custody.

Bitcoin (BTC) and ether (ETH) are facing downward pressure as the multimillion-dollar Coldcard hardware wallet exploit enters its fifth day, reigniting concerns about the risks of personally holding digital assets outside exchanges.

The incident has damaged sentiment across crypto communities, with many smaller investors reporting the loss of long-held coins and questioning the reliability of self-custody solutions.

Marex analysts said the attack has created additional pressure on market confidence by encouraging some holders to move their assets back to centralized exchanges, reversing one of crypto’s core principles of self-custody. They noted that when trust in cold storage itself is affected, lower prices alone are unlikely to restore confidence.

Considering the estimated $114 million in stolen bitcoin, BTC’s market reaction has been relatively modest. Bitcoin recently traded 1.5% lower over 24 hours at around $62,595, a level it has tested several times in recent weeks, while ether declined nearly 2% to $1,842. The CoinDesk DeFi Select Index also fell 2.5%.

Bitcoin’s 200-week simple moving average, currently above the $63,000 mark, has regained attention after Michael Saylor’s Strategy (MSTR) revealed it is monitoring the long-term indicator and suggested it could restart bitcoin purchases following a five-week pause. The company’s potential buying activity would be supported by preferred stock financing carrying a high 12% yield.

Geopolitical developments remain uncertain. President Donald Trump said fresh negotiations with Iran were scheduled to begin, but Iranian officials quickly disputed the claim. Iran’s Foreign Ministry spokesperson Esmaeil Baghaei said the country had no plans to host a U.S. delegation or send representatives for talks.

Derivatives Market Positioning

Bearish long-short ratio:
Crypto futures taker activity has become more defensive compared with late last week, with short positions accounting for more than 52% of volume. Takers are traders who immediately execute orders against existing liquidity in an exchange order book.

Bitcoin open interest rises:
Bitcoin futures activity has increased modestly, with open interest climbing to a one-month high of 772,000 BTC. Market positioning remains slightly bullish, with annualized funding rates at around 4%. However, the 24-hour cumulative volume delta is slightly negative, indicating sellers are showing more aggression through market orders.

Altcoin positioning remains mixed:
ADA, ETH, and BCH recorded notable increases in open interest, while SOL’s open interest continued declining. TRX, DOGE, CC, and GRAM showed negative funding rates, suggesting increased demand for short positions. However, funding levels are not deeply negative, indicating that bearish positioning is not yet overcrowded.

Volatility remains stable:
Despite the Coldcard incident and rising Treasury yields, crypto options markets show no major signs of stress. The BVIV 30-day implied volatility index has remained near 37% for four consecutive days. Implied volatility reflects demand for options and hedging products used to protect against market uncertainty and price swings.

Call options lead activity:
On Deribit, the most actively traded options are call contracts targeting $68,000 and $70,000, reflecting bullish expectations among some traders.

Token Developments

NEAR Protocol’s Intents system has surpassed $24 billion in lifetime transaction volume, according to the network’s monthly development update. Intents allow users to specify the outcome they want, such as exchanging one token for another across multiple blockchains, while the network handles the execution process automatically.

The growth followed the release of protocol version 2.13 last month, which introduced several upgrades. Quantum-resistant signing improves transaction security against future quantum computing threats, while dynamic resharding allows the network to automatically distribute workloads across additional processing lanes as demand increases.

NEAR is also expanding into artificial intelligence by introducing staking for AI computing resources. The feature allows NEAR holders to lock tokens to support computing infrastructure used by AI applications while earning rewards tied to AI demand.

NEAR was recently trading near $1.72, according to CoinDesk data.

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