The crypto market remained subdued on Thursday, with bitcoin BTC$79,550.57 holding below $80,000 and a number of altcoins facing deep losses.

The largest cryptocurrency was recently changing hands around $79,800 after dropping to as low as $78,720 on Wednesday. Crucially, it is still below the weekly open of $82,500.

Risk assets have been pressured after lofty inflation figures from the U.S., with the Producer Price Index (PPI) rising 6%, marking its highest annual level since 2022 and stoking inflation concerns.

The "Altcoin Season" indicator dropped back to 43/100 after hitting 50/100 on Monday, demonstrating a risk-off mood among crypto investors.

Derivatives positioning

• Futures volume over 24 hours rose 14% to $189 million, while open interest (OI) declined 2% to $133 billion, suggesting some positions have been closed amid higher trading activity.
• Liquidations surged 68% to nearly $400 million, with the vast majority coming from long positions. This indicates that the recent move largely wiped out leveraged bullish bets.
• To illustrate how one-sided positioning had become, 24-hour BTC liquidations totaled $117 million, of which $102 million were longs. This reinforces the idea that market participants were heavily positioned for an upside breakout above the 200-day moving average, which sits just above $82,000.
• Bitcoin’s OI has, nonetheless, edged higher, rising to 750K BTC from 745K BTC a day earlier. This suggests continued capital inflows into derivatives markets. However, the 24-hour cumulative volume delta (CVD) is negative, implying that sell orders are dominating buy limit orders.
• Ethereum’s OI reached a record high of 15.42 million tokens earlier today, surpassing the previous peak of 15.33 million set in July. This reflects increasing demand for leverage in a range-bound market, with ETH prices largely oscillating between $2,200 and $2,450 over the past four weeks.
• Across the broader market, the OI-adjusted 24-hour CVD for most of the top 25 coins remains negative, suggesting sustained selling pressure. If this persists, it may point to further downside risk, particularly in the altcoin market, which is heavily influenced by derivatives.
• Despite recent volatility and upcoming catalysts, such as the Clarity Act markup due today, both 30-day implied volatility indexes for both bitcoin and ether remain subdued.
• In the options market on Deribit, the $75,000 strike bitcoin put expiring on May 29 has emerged as the most actively traded contract. A put option gives the holder the right to sell BTC at a predetermined price, signaling downside hedging demand. Interestingly, the rest of the top five most traded contracts are call options.

Token talk

• CoinDesk's Memecoin Select Index (CDMEME) was the worst-performing benchmark on Thursday, tumbling by more than 4% since midnight UTC and 10% over the past 24 hours as risk-off sentiment rippled across the sector.
• The DeFi Select Index (DFX) also showed weakness, losing 1%. The bitcoin-heavy CoinDesk 20 (CD20) fell just 0.16%.
• Of the 100 assets in the Coin Desk 100 (CD100), 75 were in the red on Thursday. Restaking token ETHFI led the downside shift with a 4.1% decline since midnight and a 7.5% loss over the past 24 hours.
• A handful of tokens defied the bearish pressure. XDC rose 7.5% while humanity protocol (H) broke out of a recent downtrend with a 3.9% move to the upside since midnight UTC.