Crypto Markets Experience a Dip as Traders Take Profits
The cryptocurrency markets took a downturn on Monday as traders capitalized on recent gains, seeking new catalysts to guide their positioning, coinciding with the U.S. observance of President’s Day. Major cryptocurrencies such as Solana (SOL) and XRP led the decline, each dropping by 4%. Bitcoin (BTC) also faced a reduction of 1.1%, while BNB Chain’s BNB saw a slight decrease of 0.5%. Dogecoin (DOGE) fell by 3%, contrasting with Cardano’s ADA and ether (ETH), both of which experienced a rise of 2% by midday in Europe.
Among midcap tokens, Jupiter’s JUP suffered a significant loss of 9%, primarily due to its controversial association with the LIBRA coin. Last week, Argentina’s President Javier Milei briefly promoted Libra as a potential aid for small businesses, yet the coin’s value plummeted shortly after its issuance, leaving its operators facing legal challenges.
The broader CoinDesk 20 (CD20), an index that tracks the largest tokens by market capitalization, recorded a decline of 1.29%. According to QCP Capital in a recent broadcast, “With no substantial crypto-specific catalysts on the horizon, price movements currently appear to be influenced more by macroeconomic factors, especially given the persistent correlation between BTC and equities.” They further noted, “Despite ongoing macro uncertainties—such as tariffs, the debt ceiling, and inflation—and the unpredictability surrounding Trump, crypto implied volatilities and the VIX are trading at their lowest levels.”
Interestingly, Bitcoin has shown resilience amid recent macroeconomic data, with open interest (OI) not experiencing a significant rebound following the January month-end expiry. This suggests that the crypto options market is largely in a wait-and-see mode, anticipating concrete policy changes rather than just pro-crypto rhetoric.
Open interest, or OI, refers to the total number of outstanding options contracts that remain open and have yet to be settled. An increase in open interest indicates more capital flowing into the options market. The $110,000 call option on Deribit has emerged as the most favored options play this month, as highlighted in a CoinDesk analysis earlier on Monday. Meanwhile, Bitcoin continues to trade within a narrow range, remaining below the $100,000 mark.
Market analysts suggest that the current preference for Bitcoin stems primarily from its growing appeal among institutional investors. Jeff Mei, COO of Taiwan-based crypto exchange BTSE, remarked in a Telegram message to CoinDesk, “While many altcoins have seen declines of 40-60% over the past month, Bitcoin’s price has demonstrated remarkable resilience, stabilizing around the $96-97k range. This stability is likely attributed to a shift in its holder base towards institutional investors, a trend that is expected to continue.”
