Bitcoin trims gains from Powell-driven surge while privacy coins lead: Crypto Markets Update

Cryptocurrency Market Update: Bitcoin and Altcoins React to Global Events

Bitcoin experienced a surge of over 2.3% overnight, reaching a high near $92,400 before retreating during European trading hours. This uptick was triggered by news of potential criminal charges against Federal Reserve Chair Jerome Powell, which also drove gold and silver prices up by 2% and 5.6%, respectively.

Following these developments, Nasdaq 100 futures dropped approximately 1%, and the dollar index (DXY) weakened, reflecting increased uncertainty among investors about the future direction of interest rates.

Although bitcoin has since returned to around $90,700—its weekend level—several alternative cryptocurrencies managed to retain their gains. Privacy-focused coins like monero (XMR) and zcash (ZEC) were at the forefront of this broader market rally.

Monero set a new all-time high, currently trading at $576 after climbing more than 12% since 21:00 UTC on Sunday, while zcash rose by 3.8%.

The strong performance of select altcoins is highlighted by CoinMarketCap's altcoin season index, which has moved to 30/100, signaling a shift from "bitcoin season" to a more neutral market stance for the first time since mid-November.

Derivatives Market Insights

• In the past 24 hours, over $200 million in leveraged futures positions were liquidated, with bullish trades making up half of these losses. This suggests that the market downturn during the Asian session caught many leveraged traders by surprise.

• Volmex's implied volatility indices for both BTC and ETH remain subdued, indicating expectations for lower price swings and reduced uncertainty in the near term.

• Open interest in monero futures has climbed to 369,000 XMR, the highest since February of last year. This rise, coupled with increasing prices, points to fresh capital entering the market and supports the ongoing uptrend.

• However, the bullish sentiment appears to be overheating, as annualized funding rates approach 80%, reflecting the high cost of maintaining long positions.

• Open interest in major cryptocurrencies such as BTC, ETH, XRP, SOL, and DOGE fell by 1% to 4% over the last day, indicating a growing sense of caution among traders.

• Despite this, funding rates for most leading tokens remain slightly positive, suggesting that optimism persists.

• On Deribit, put options for BTC and ETH continue to trade at a premium compared to calls across all maturities, signaling a preference for downside protection.

• Block trading activity reveals a preference for the "iron condor" strategy in BTC, which is typically used when traders expect prices to remain stable within a narrow range. For ETH, calendar spreads were the dominant strategy.

Altcoin Highlights

• Privacy coins led the market on Monday, with monero reaching a new peak and zcash continuing its rebound after last week's governance controversy.

• Aerodrome Finance's AERO token jumped 10% to $0.60 from a Sunday low of $0.545, though it has since settled around $0.57.

• Among major cryptocurrencies, Solana's SOL outperformed, maintaining a 2.7% gain from Sunday's low of $135.

• This upward movement is attributed to a surge in memecoin trading, with the Pump.fun platform surpassing $1.6 billion in trading volume over the past 24 hours, signaling renewed interest from retail investors.

• Newly launched memecoins, such as whale guru, skyrocketed by over 146,000% since their January 11 debut, reaching $10.5 million in volume and sparking a wave of new token launches as creators seek to ride the latest trend.

• Not all altcoins saw gains; Lighter's LIT token dropped more than 10% in the last 24 hours as enthusiasm following its airdrop faded.

• Polygon's native POL token also experienced a prolonged decline, now down over 15% from its Saturday high of $0.1867.