Market Snapshot: Altcoins Turn Higher as Bitcoin Maintains Key Support Above $88K

Bitcoin held firm above a crucial support level on Wednesday, prompting traders to rotate into altcoins and fueling sharp rebounds across a market still dominated by extreme fear.

BTC hovered near $86,000 and remained roughly unchanged from Tuesday, while speculative tokens outperformed. STRK led the rally with a 28% surge. Analysts warn, however, that a breakdown below $88,000—especially amid thin liquidity—could trigger another broad market sell-off and pull altcoins lower with it.

The bounce comes after a brutal stretch in which roughly $400 billion in market value evaporated across the crypto complex.

Derivatives positioning

Open interest in futures tied to major assets such as BTC and ETH continues to shrink, reflecting ongoing risk aversion and sustained capital outflows. Confidence among derivatives traders typically recovers slowly after large drawdowns.

A few exceptions stand out: BCH and LINK saw open interest climb by more than 2% in the past 24 hours.

ZEC perpetuals remain deeply skewed to the downside, with annualized funding rates near -50%, indicating strong demand for short positions following the token’s massive rally since September. Funding rates across most top assets remain flat to modestly positive, suggesting cautious optimism.

In options markets, positioning has turned decisively bearish. On Deribit, the $85,000 BTC put has become the most crowded strike—replacing the $140,000 call that dominated trader activity just weeks ago. Short-dated volatility remains elevated as demand for BTC and ETH puts persists.

Block flow shows bitcoin traders gravitating toward call diagonal calendars and strangles, while ether-focused participants favored call spreads and straddles.

Token talk

Altcoins showed signs of life on Wednesday. AAVE, CRO, and INJ posted gains between 2% and 6%, offering brief relief after five straight days of heavy selling.

The CoinDesk 10 Index (excluding BTC) is up slightly on the day but remains down 19.5% over the past month. The Fear & Greed Index continues to signal “extreme fear” at 16/100, suggesting sentiment may be oversold.

Market direction from here depends heavily on bitcoin’s next move. Traders say a recovery toward $98,000 would help stabilize broader conditions.

Ether traded at $3,095 after gaining 1% against BTC, while bitcoin dominance slipped to 58% from 60% earlier this month—evidence of selective rotation into altcoins.

STRK remained the standout performer, climbing 28% amid rising deposits into its BTCFi initiative, which now holds more than 650 BTC ($72 million) and 900 million STRK—about 20% of the token’s total supply—contributing to tighter exchange liquidity.

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