Cryptocurrency recovers from low levels, altcoin season metric returns to January peak.

Bitcoin surged up to 3.7% overnight before reducing its gains, while altcoins showed stronger performance and the altcoin season indicator reached its peak since January.

Bitcoin rise leads to altcoin rally (Kanchanara / Unsplash modified by CoinDesk)

What to know:

• BTC increased as much as 3.7% before reducing gains to stay 2.4% higher near $65,600, within its three-week trading range.
• SOL and ADA gained 4.5%, while VIRTUAL, ETHFI, and MORPHO saw increases exceeding 10%, contributing to the altcoin season metric returning to its January high.
• The Relative Strength Index (RSI) rebounded from oversold levels to neutral, indicating potential consolidation. Equities also saw slight increases, and silver’s 4% rise suggests a speculative risk appetite.

Bitcoin BTC$65,438.22 underwent a volatile trading session overnight, climbing by as much as 3.7% before giving back part of those gains.

The leading cryptocurrency remains positive since midnight UTC, increasing by 2.4% to trade around $65,600. This price is still within a range that has been stable for the past three weeks.

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The altcoin market is also exhibiting positive movement, with layer-1 tokens solana (SOL) and ADA$0.2708 each recording a 4.5% rally while tokens such as VIRTUAL, MORPHO, and ETHFI increased by more than 10%.

U.S. equity index futures rose in tandem with the crypto market. Silver’s 4% increase since midnight indicates that the broader risk-asset rally is driven by speculation rather than specific news events.

The average crypto relative strength index (RSI) has moved out of oversold levels and back into a neutral state, suggesting that a consolidation period could be on the horizon for Wednesday.

Derivatives positioning

• Cumulative crypto futures open interest (OI) has increased by over 1.5% to $93.5 billion, although much of this notional growth is attributed to spot price appreciation rather than new capital inflows.
• OI in bitcoin and ether (ETH) futures has remained largely unchanged over the past 24 hours, while futures related to tether gold (XAUT) have seen a 12% drop in open positions. This indicates a rotation of capital away from gold-linked assets.
• TRX, AVAX, SOL, LINK, and HBAR are highlighted as coins with the highest 24-hour cumulative volume delta. Positive cumulative volume delta readings suggest that buying interest is surpassing selling interest.
• Bitcoin’s annualized 30-day implied volatility index, BVIV, decreased to 56%, reversing the earlier week spike to 65%, indicating a return to market stability. This trend is similar for Ether’s volatility.
• On Deribit-listed bitcoin options, the $60,000 put has emerged as the most popular option, reflecting concerns over potential downside. Puts, or bearish positions, for both BTC and ETH are trading at higher prices compared to calls, or bullish positions.

Token talk

• The “altcoin season” indicator reached its highest point since early January on Wednesday, propelled by rallies across various assets.
• The AI agent token VIRTUAL led the charge, rising 15.5% since midnight and more than 20% over the last 24 hours, making it the top-performing asset in the CoinDesk 80 (CD80) index, which itself gained 1.7%.
• Restaking token ETHFI also increased by over 10% in the past 24 hours after CEO Mike Silagadze suggested the potential launch of a stablecoin.
• Lending platform Morpho’s native token capped off Wednesday’s altcoin rally, having risen by 45.9% over the past month following a 15% gain in the last 24 hours.
• Conversely, toncoin (TON) and pippin (PIPPIN) are both showing losses in the past 24 hours after earlier increases this week, suggesting a rotation of assets among traders and investors.