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Bitcoin pulled back from a two-week peak of $64,500 as declining open interest and soft spot demand raised concerns about whether July’s 8.4% rally can continue. On Tuesday, BTC slipped for the first time this month, ending its longest winning streak since March after reaching its recent high a day earlier.
Ether followed bitcoin’s move, falling to $1,770 after touching $1,830 on Monday.
The recent market rebound in July has largely been driven by a short squeeze that began forming in late June, when bearish positions were elevated even as bitcoin traded near its lowest levels of the year. As prices recovered from oversold conditions, crypto assets climbed steadily, supported by the unwinding of those short bets.
Since July 1, the total crypto market has expanded by 8.4%, bringing its overall valuation to $2.16 trillion.
Meanwhile, U.S. equity futures weakened on Tuesday, with Nasdaq 100 contracts down 0.9% as the pullback from June’s record highs extended.
Derivatives positioning
In the past 24 hours, more than $500 million in leveraged crypto futures positions have been liquidated, with bearish bets accounting for the majority for a sixth consecutive day.
Despite bitcoin’s recent gains, futures open interest has declined to 740K BTC from 776K BTC recorded on July 3. This suggests that derivatives traders are not fully backing the price increase, while weak spot demand—seen in ETF flows and the Coinbase premium—adds to doubts about the rally’s durability.
A similar pattern is visible in ether, which had recently outperformed bitcoin.
Solana’s open interest has also dropped, falling to 68 million tokens from over 76 million in late June, indicating that its 10% price rise has not attracted strong leveraged participation.
Canton Network’s CC token fell more than 4% over the past day, even as open interest rose 3% to 245.59 million tokens. Combined with negative funding rates and weak volume metrics, this points to increasing bearish sentiment.
Across the broader market, many tokens show negative OI-adjusted cumulative volume delta, suggesting that sellers are becoming more aggressive through market orders—often a sign of potential downside pressure.
Volatility and options
Bitcoin’s 30-day implied volatility index (BVIV) has rebounded to 40%, ending a six-day decline, though it remains well below January’s highs near 60%—a relatively supportive sign for bulls. Ether’s volatility index shows a similar trend.
Options markets on Deribit continue to reflect lingering downside risks, with both bullish (calls) and bearish (puts) positions among the most actively traded contracts.
On the decentralized exchange Derive, a large call condor strategy on HYPE suggests expectations for prices to remain within a $75–$80 range through July 24.
Token trends
The altcoin market is showing mixed signals. Tokens such as FET, KASPA, and WLD have declined despite the broader market recovery, while ETHFI and LIT have surged more than 30% over the past week.
WLFI stood out on Tuesday with a 4.8% gain, although it remains down over 89% since its launch last August.
This divergence among altcoins reflects a more mature market environment, where performance is increasingly driven by individual fundamentals and on-chain activity rather than broad market trends. Historically, altcoins tended to move in sync.
CoinMarketCap’s Altcoin Season Index currently sits at 46 out of 100—lower than last week’s peak but higher than May levels, when it hovered near 30.
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