The crypto market compounded a negative week with a continued drawdown on Friday. Bitcoin BTC$100,108.89 dropped to $100,600 and ether ETH$3,239.55 is languishing as $3,270.

The move appears to be in line with the wider crypto market trend of late, which has seen BTC lose 18% of its value over the past 30 days. Both the CoinDesk 5 Index (CD5) of the largest, most active tokens and the broader CoinDesk 20 Index (CD20) have lost about 3% in the past 24 hours.

The fallout can still be attributed to comments out of the Federal Reserve earlier in the week that suggested a potential cooling of the rate-cutting cycle, causing a rise in the U.S. dollar and a slump in risk assets.

The altcoin market, with the exception of AI tokens, is performing worse than bitcoin, with the "altcoin season" index at 22/100, its lowest in more than 90 days.

Derivatives positioning

By Saksham Diwan

• The BTC futures market continues to reflect caution and low conviction.
• Open interest (OI) is showing a slow but steady downward trend, settling at $24.91 billion. That's down from $26 billion last week, an indication that traders are reducing leverage.
• The three-month annualized basis is low at 3%-4% and funding rates are under 10% annualized across major exchanges.
• The deleveraging and suppressed derivatives metrics together reinforce a general environment of low profitability and a lack of strong directional commitment from the futures side.
• The BTC options market, in contrast, is displaying mixed but strongly bullish signals.
• Despite near-term backwardation in the implied volatility (IV) term structure, indicating short-term volatility, the trading bias is decisively upside.
• This is confirmed by the 24-hour put/call volume leaning 64%-35% in favor of calls and the one-week 25-delta skew holding at 10%, which signifies traders are paying a clear premium for upside exposure in the very near term.
• Bitcoin's price drop saw $601 million in liquidations over the past 24 hours, with 65% of losses borne by longs, confirming the impact of forced selling. Crucially, with the current BTC price around $101,000, the psychological $100,000 level is now fortified by multiple $30 million long liquidation walls, positioning it as a strong support level likely to be aggressively defended by the market.

Token talk

By Oliver Knight

• The altcoin market faced more downside pressure on Friday, led by a 5% drop in XRP$2.1745 and a 3.5% decline for ether ETH$3,239.55.
• Both tokens are now approaching critical levels of support that provided short term relief on Nov. 4. A break below these levels would signal continuation to the downside.
• CoinMarketCap's "altcoin season" index is at 22/100, its lowest in more than 90 days, as traders move out of tokens lacking liquidity ahead of a potential sell-off.
• Last month's leverage-inspired drawdown presented several vulnerabilities with altcoin order books, notably how a lack of resting limit orders can cause dramatic spikes when volatility rises, which subsequently prompts a wave of liquidations on derivatives exchanges.
• Another metric that may worry bulls is that the average relative strength index (RSI) indicator is at 49.52/100, no longer oversold as it was earlier this week. This means that the market is now neutral and is no longer likely to bounce.
• However, the altcoin market is clinging on to one glimmer of hope moving into the weekend: The AI sector is booming.
• FET is up by 23% over the past 24 hours and NEAR is narrowly behind with a 22% gain. Volume profiles for both tokens suggests retail participation, with significant flows on Binance and Kucoin.