Market Overview
Last week witnessed heightened volatility across crypto markets, driven by deteriorating sentiment following the largest exchange hack in history. The unwind of basis "carry trades" exacerbated selling pressure, amplifying price swings.
Key Developments
- ByBit Hack: ~1.4 billion USD in ETH stolen, severely dampening market confidence.
- Sentiment Shift: The Cryptoasset Sentiment Index flipped neutral after triggering contrarian buy signals earlier.
- Equity Market Parallels: AAII US equity retail survey recorded its highest bearish readings since 2022, mirroring crypto sentiment.
Performance Analysis
Cryptoasset Trends
- BTC Drawdown: Bitcoin briefly entered bear territory with a 27.6% drop from all-time highs.
- Altcoin Divergence: 55% of tracked altcoins outperformed BTC, though Ethereum lagged.
- Carry Trade Unwind: Declining futures basis rates (e.g., BTC’s 3-month annualized basis fell to 6.7% p.a.) prompted whale sell-offs.
Catalysts for Rebound
- BlackRock’s Move: Bitcoin added to model portfolios, signaling institutional adoption.
- Trump’s Crypto Reserve Proposal: Plans for a "U.S. Crypto Reserve" boosted prices (+10% Sunday).
Sentiment & Fund Flows
Sentiment Metrics
- Fear & Greed Index: Reflects "Fear" levels, though improving slightly.
- CARA Index: Suggests neutral-to-bullish cross-asset risk appetite.
ETP Outflows
| Asset | Net Outflows (USD) |
|----------------|--------------------|
| Global Crypto | -2,997.3M |
| US BTC ETFs | -2,618.8M |
| Ethereum | -324.9M |
👉 Explore real-time crypto ETP data
On-Chain & Derivatives Data
Bitcoin Metrics
- Exchange Balances: Dropped to 2.706M BTC (13.6% supply), lowest since 2018.
- Whale Activity: +6,943 BTC net deposits to exchanges.
Futures & Options
- BTC Perpetuals: Funding rates stayed positive but low.
- Implied Volatility: 1-month ATM options at 53.9% p.a.
Bottom Line
- Short-Term Pressure: Hack-induced sell-offs and carry trade unwinds dominated.
- Long-Term Catalysts: Institutional adoption and political support may reverse trends.
FAQ
Q: How does the ByBit hack affect market stability?
A: Large-scale hacks erode trust, triggering sell-offs and regulatory scrutiny.
Q: What’s driving altcoin outperformance?
A: Risk appetite shifts; altcoins often decouple from BTC during sentiment recoveries.
Q: Are BTC ETFs seeing sustained outflows?
A: Yes—US spot BTC ETFs led weekly outflows (-2,618M USD), but long-term inflows are projected.
👉 Dive deeper into crypto market strategies