Bitcoin remains above $72,000 as the cryptocurrency market stabilizes following a surge.

Bitcoin and ether saw slight increases as traders evaluated macroeconomic risks, derivative positions, and the potential for bitcoin to maintain momentum toward $80,000.

Bitcoin remains calm after breakout (Ian McGrory/Unsplash)

What to know:

• Bitcoin was trading around $72,700, maintaining a position above $70,000, but not managing to extend the upward movement towards the $80,000 mark that analysts had anticipated.
• Equity markets experienced an uptick following reports that Iran had contacted the U.S. The Dollar Index slipped, though it remains 3.5% higher since late January.
• The CoinDesk 5 and CoinDesk 10 indices saw approximately 3% gains over a 24-hour period, while DeFi and computing tokens showed minimal movement. MANTRA experienced a surge following its token migration and redenomination.

The cryptocurrency market showed little variation on Thursday, with bitcoin BTC$72,857.56 and ether (ETH) reflecting gains of less than 1% as traders consolidated after Wednesday’s breakout.

Although bitcoin significantly remained above the $70,000 threshold that had previously hindered earlier rallies, it has not succeeded in achieving the anticipated upward shift to $80,000.

Global equities reacted positively to reports indicating that Iran had covertly approached the U.S. to negotiate a resolution to the conflict in exchange for curbing its missile production.

The Dollar Index (DXY) declined as a result but still stands 3.5% higher since late January as traders seek to make sense of possible interest rate adjustments by the Federal Reserve. Disruption in the Strait of Hormuz could lead to inflation increases, compelling the Fed to raise rates to maintain elevated deposits.

Bitcoin tends to rise when the dollar weakens and declines when the dollar is strong.

Derivatives positioning

• Bitcoin futures open interest (OI) has risen, with the total reaching 680K BTC, the highest in nearly two weeks. This trend supports the gains in the spot price.
• Ether’s OI climbed to 13.41 million ether, marking the highest point since January 31. XRP futures activity remains low, with OI remaining at recent lows below 1.70 billion XRP. Similar trends are observed for Solana’s SOL.
• OI in futures linked to gold tokens Tether gold (XAUT) and PAXG$5,171.38 continues to decline as cryptocurrency prices rise. Investors may be reallocating funds into major cryptocurrencies as the gold price rally stalls.
• Futures activity for the privacy-focused ZEC is also increasing, with total OI breaking a two-month downtrend.
• Annualized perpetual funding rates for bitcoin and ether remain slightly positive, indicating a bullish sentiment. In contrast, rates for XRP and SOL remain marginally negative.
• Bitcoin and ether’s 30-day implied volatility indexes have stabilized within recent ranges, reflecting market steadiness. Wall Street’s volatility index, VIX, has retreated to 21% from a peak of 28% earlier in the week.
• On Deribit, put skews in bitcoin and ether options have weakened, yet persist alongside a rise in activity for higher strike calls, indicating bullish bets.
• Block flows in options showed interest in call calendar diagonal spreads for both bitcoin and ether.

Token talk

• Layer-1 token MANTRA has completed a token migration and rebranding, replacing the previous OM token with the MANTRA designation and implementing a 1:4 redenomination, resulting in a 25% increase in token price over the last 24 hours.
• The optimistic narrative surrounding privacy tokens at the year’s start faltered in February as ZEC, DASH, and XMR entered a significant correction, but monero (XMR) seems to be reversing that trend, showing a 5.2% increase since midnight UTC and a 9.8% gain over the past week.
• Major cryptocurrencies led market gains in the last 24 hours, with the CoinDesk 5 (CF5) and CoinDesk 10 (CD10) indexes both rising about 3.1%. The DeFi Select Index and Computing Select Index experienced increases of only 0.4% and 0.7%, respectively, during the same timeframe.
• If bitcoin can continue its advance toward $80,000 and establish a solid base, profits may be reinvested into more speculative altcoin positions, but for now, the market is exercising caution.