Crypto markets extended their losses over the weekend, reinforcing a broader downturn as fading hopes for near-term Fed rate cuts and shrinking liquidity intensified selling pressure across major tokens.
Bitcoin (BTC) and ether (ETH) remain stuck in bearish territory after a sharp weekend slide drove BTC to $93,400 and ETH to $3,050 — their weakest levels in months. The retreat adds to an established pattern of lower highs and lower lows across multiple timeframes, strengthening the case for a sustained downtrend.
Traders are also watching a key liquidation cluster. A drop in BTC toward $92,840 could trigger roughly $62 million in forced unwinds, potentially accelerating a decline toward the next major support around $87,500, a level last revisited in March.
The shift in sentiment comes as markets reassess the Federal Reserve’s policy path. Expectations for a December rate cut have faded to just 50%. Lower borrowing costs typically benefit risk assets like crypto by reducing the relative attractiveness of the U.S. dollar.
Derivatives Point to Ongoing Risk Reduction
Capital continues to exit the derivatives market, with open interest (OI) in BTC and ETH futures falling over the past 24 hours. ZEC and LTC futures saw even steeper declines, with OI down more than 6% and 10%, respectively. The only assets showing slight OI growth were XRP and ADA, each rising just over 1%.
Options activity on Deribit underscores the cautious tone. BTC traders remain biased toward puts, while front-end volatility has surged above 50% annualized. ETH options flows also skew bearish.
Strategy-wise, BTC block flows were dominated by iron condors and strangles — typically used to position for volatility or further downside. In ETH, call calendar spreads accounted for more than half of total activity, reflecting expectations for near-term weakness but potential stabilization later.
Altcoins Struggle as Liquidity Evaporates
Altcoins remained subdued following Friday’s steep sell-off, which extended into the weekend. While some large-cap tokens posted slight rebounds on Sunday, most are still down more than 10% over the past week.
Thin liquidity amplified the decline. Solana (SOL) slipped to a five-month low of $135, while ether (ETH) briefly hovered just above $3,000, erasing all gains accrued since mid-summer.
Even privacy-focused tokens have cooled. Zcash (ZEC), which surged from $41 to $670 during a months-long rally, has begun to lose momentum.
Market sentiment reflects this strain. The Fear and Greed Index sits at extreme fear with a reading of 17/100 — the lowest since April. Meanwhile, CoinGlass’s average RSI sits in the neutral zone at 43.52, indicating that despite the widespread declines, markets have not yet reached traditional oversold levels.
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