Shift in Crypto Market Sentiment: A Closer Look at the Americas

By Omkar Godbole (All times ET unless specified otherwise) The cryptocurrency market has turned bearish, with bitcoin displaying signs of a change in character, a term used by forex traders to describe a shift in market sentiment. This change is evident in the options market, where bitcoin bulls have dominated since last October, but are now showing signs of weakening. The $95K put option has garnered significant open interest of $1.80 billion, closely rivaling the $1.85 billion locked in the most popular $140K call option. Additionally, put options at strikes $80K, $85K, and $90K have open interest ranging from $1.40 billion to $1.55 billion, indicating a growing bearish sentiment. This shift in character is a significant indicator of the market's evolving attitude toward risk. It occurs when the price breaks below a previous swing low, signaling a potential reversal in trend. In the case of bitcoin, its spot price recently dropped below $107,250, breaking through a low from early September and invalidating the bullish higher highs, higher lows pattern. As a result, bitcoin's price is currently trading near $105,000, representing a 1% decline over the past 24 hours. Major altcoins, including ether, XRP, and BNB, have also registered significant losses, with the CoinDesk 20 Index dropping more than 2%. The broader market weakness is evident in the decline of indexes tied to memecoins, computing, and smart contract tokens, excluding ether. However, the DeFi Select index stood out with 6% gains, largely due to the surge in Uniswap's UNI token, which rose 23% after the protocol founder proposed a plan to activate protocol fees and burn UNI tokens. In other news, the U.S. Treasury Department and the IRS have announced new guidelines, paving the way for Wall Street-traded crypto products to generate staking yield for investors. Meanwhile, concerns are growing about the decline in the share price of business-development companies, despite the overall market strength, potentially signaling distress in the high-yield segment of private credit. For more analysis and updates, see CryptoMarkets Today and CoinDesk's Crypto Week Ahead.