Cryptocurrency prices for Bitcoin and ether remain stable ahead of U.S. inflation data release.

Derivatives indicate cautious optimism, featuring reduced leverage, favorable funding rates, and an increasing institutional basis, although traders continue to pay a premium for short-term downside protection.

U.S. inflation data is expected later Friday (Markus Winkler/Unsplash modified by CoinDesk)

Key points:

• Bitcoin briefly reached $67,000 and, while higher on the day, is still poised for a fourth consecutive weekly decrease.
• Derivatives indicate cautious optimism, featuring reduced leverage, favorable funding rates, and an increasing institutional basis, even though traders continue to pay a premium for short-term downside protection.
• Solana-based memecoin launchpad Pump.fun’s PUMP token saw an increase of over 5% following the introduction of GitHub-linked fee allocation tools.

Bitcoin BTC$66,966.03 tested $67,000 early Friday but faced resistance, although it remains approximately 1% higher since midnight UTC, with ether ETH$1,953.45 rising by half that amount. The derivatives sector also displays signs of optimism.

The CoinDesk 20 Index (CD20) remains relatively stable, up by only 0.7% during the timeframe.

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While these gains represent a rebound from the previous day’s U.S. trading, which saw the cryptocurrency market retreat toward last week’s lows, bitcoin is still on course for its fourth consecutive week of declines. This marks the longest losing streak since mid-November.

At the same time, a decrease in trading activity and diminishing volatility are impacting volumes.

Traders are likely awaiting the U.S. Consumer Price Index (CPI) report scheduled for later today for insights on market direction. A reading higher than expectations could elevate bond yields and the dollar, exerting additional pressure on risk assets. Conversely, a lower reading might indicate conditions more favorable for risk-taking.

Nonetheless, a significant increase would be necessary to elevate the bitcoin price to $85,000, a threshold that Deribit’s chief commercial officer, Jean-David Péquignot, indicated would signify that the largest cryptocurrency’s long-term rally is no longer “broken.”

Derivatives

• The market is reflecting signs of renewed activity as open interest (OI) has decreased to $15.5 billion, indicating a purging of late-cycle leverage.
• Perpetual funding rates have shifted from neutral to positive across all platforms, now ranging between 0% and 8%. This broader optimism is mirrored by institutions, as the three-month annualized basis surged to just over 3%, reflecting the first significant increase in professional confidence.
• The bitcoin options market shows a returning call volume of 65%, even as the one-week 25-delta skew has eased to 17.9%. Despite this “bottom-fishing” activity, the implied volatility (IV) term structure remains in short-term backwardation, confirming that traders are still incurring a high “panic premium” for immediate downside protection.
• Data from Coinglass shows $256 million in liquidations over 24 hours, split 69-31 between long and short positions. Bitcoin ($112 million), ether ($52 million), and others ($16 million) led in terms of notional liquidations.
• The Binance liquidation heatmap highlights $68,800 as a crucial liquidation level to watch in the event of a price increase.

Token Talk

• PUMP, the token associated with Solana-based memecoin launchpad Pump.fun, has increased by more than 5% in the last 24 hours.
• The platform has launched a new feature allowing token communities to allocate fees directly via its mobile app, now including GitHub account integration.
• This integration provides a streamlined method for creators to distribute automatic payouts generated by a token’s community, with additional social features anticipated in the future.
• In practical terms, this enables communities to begin supporting creators on GitHub through a share of the fees generated. To receive the fees, creators must claim them through the platform’s mobile application.
• Pump.fun was a significant driver behind a major memecoin trading surge early last year, which saw its monthly trading volume exceed $11 billion. However, volume has since decreased to $1 billion last month, according to DeFiLlama data.