Bitcoin Hovers Around $78K as Gold Rises and Altcoins Take a Breather

• Bitcoin steadied around $77,800 on Monday after a 24% weekly rally, with traders taking a pause following a Treasury buyback announcement that helped drive more than $3 billion in short liquidations.
• BTC was nearly unchanged from midnight UTC, consolidating after its biggest weekly advance in more than three years.
• Bitcoin rallied from below $63,000 to nearly $79,500 last week, marking its strongest weekly performance since March 2023. The surge came after the U.S. Treasury doubled its buybacks of long-term bonds, breaking Bitcoin out of a six-week range and forcing over $3 billion in short positions to unwind within 24 hours.
• Gold and crypto continued to outperform stocks. Gold gained around 0.8% Monday and remained close to record highs as Treasury Secretary Scott Bessent’s debt-management strategy continued to influence long-term yields. The 30-year Treasury yield had briefly reached a 19-year peak before falling after the buyback announcement.
• Altcoins were mostly flat to modestly lower, pointing to consolidation rather than a broad market reversal. Bitcoin dominance remained near 59.2%, while the Altcoin Season Index rose to 42 from 33 on Friday but remained firmly in Bitcoin territory. Last week’s altcoin gains were concentrated among select tokens rather than reflecting a broad shift away from BTC.

Derivatives Market

• BTC open interest drops during the rally: Bitcoin futures open interest fell to 715,000 BTC, the lowest level in two months, from 762,000 BTC on Aug. 18, according to CoinGlass. The decline suggests spot buying and short covering accounted for much of the recent move instead of traders aggressively adding leveraged longs.
• ETH, SOL and XRP show similar positioning: Futures open interest for Ether, Solana and XRP also declined while their prices increased, reinforcing the view that the rally has been largely supported by spot demand.
• ZEC sees open interest expand: Zcash futures open interest increased to 2.24 million tokens from 1.81 million a week earlier, while its price jumped more than 70%. Price and open interest rising together is generally viewed as a sign that an uptrend has stronger participation behind it.
• ZEC has the strongest buying pressure: Zcash recorded the highest positive OI-adjusted weekly cumulative volume delta among major cryptocurrencies, suggesting buyers were aggressively executing market orders.
• Funding rates remain under control: Annualized funding rates for Bitcoin, Ether and other major tokens stayed near 10%, indicating a bullish bias without signs of extreme leverage.
• BTC implied volatility spikes: Bitcoin’s 30-day implied volatility, measured by BVIV, rose to 47% annualized from 36% a week earlier. The sharp move is notable because implied volatility often increases during periods of uncertainty and market stress. Ether’s EVIV has also climbed.
• Options markets show guarded optimism: Short-term call-put skew on Deribit turned positive, showing that calls are trading at a premium to puts. However, recent 24-hour trading volumes remain mixed, with the $70,000 put among the most active contracts alongside several calls.

Token Moves

• Hyperliquid (HYPE): HYPE declined 3.3% to around $79.59 after reaching a record $83.30 late Sunday. The token remains up about 28% over seven days after ranking among the strongest performers last week.
• Aave (AAVE): AAVE slipped 0.6% to about $140.68 but remains more than 62% higher over the past week. Trading activity stayed elevated as DeFi tokens benefited from renewed risk appetite.
• XRP: XRP fell 2.8% to $1.48, giving back some of its recent gains. It remains up roughly 47% over seven days, outperforming most large-cap crypto assets.
• Morpho (MORPHO): MORPHO dropped 6.2% to roughly $2.73. Despite the decline, it remained up 18% over 24 hours and 33% over the week, indicating that Monday’s weakness may largely reflect profit-taking.
• Ethena (ENA): ENA was among last week’s biggest gainers, roughly doubling to $1.79 after recovering from a prolonged selloff that had erased more than 90% of its value.