Bitcoin Drops Below $80K While Asian Tech Shares Rally and Fed Meeting Opens

Bitcoin dropped beneath $80,000 on Tuesday as digital assets failed to mirror gains across Asian technology markets. BTC declined 0.4% from midnight UTC to approximately $79,700, while Ether slipped 0.5% to $2,323. The CoinDesk DeFi Index fell 1.8%, becoming the worst performer among CoinDesk indexes after standing out as the sole gainer on Monday.

U.S. stock futures edged down ahead of earnings reports from major technology companies later this week. Asian equities moved higher, with South Korea’s Kospi advancing 3.1%, but cryptocurrency prices showed little response to the rally. Oil prices also climbed, bringing U.S. crude close to $102 per barrel.

Investors are turning their attention to the Federal Reserve’s two-day policy meeting, which began Tuesday. The central bank is due to announce its rate decision on Wednesday. CME FedWatch data indicated an approximately 90% chance of no change, while traders awaited signals about the possibility of further tightening before the year ends.

U.S. spot Bitcoin ETFs offered some support, recording $110 million in net inflows on Monday, according to Farside Investors. The inflows ended two straight days of withdrawals.

Crypto Futures Volume Rebounds

Trading activity in cryptocurrency derivatives picked up, with futures volume increasing 18% to $152 billion over 24 hours. Open interest rose only 0.95%, while liquidations decreased 13% to $133 million.

The taker long-short ratio came in at 49.54% for longs and 50.46% for shorts, indicating a nearly even balance between aggressive buyers and sellers.

Bitcoin and Ether each declined about 1.1% over the same period, while Solana lost 1.91%. Nevertheless, futures open interest increased approximately 1% for BTC, 0.8% for ETH, and 3.6% for SOL. Solana saw the largest increase, suggesting traders were opening additional positions despite falling prices.

Funding rates stayed positive for all three assets, meaning long-position holders continued to pay short sellers. Solana’s cumulative volume delta, however, finished negative, indicating that market orders favored selling.

Semiconductor Contracts Gain as Open Interest Falls

SOXL, a contract tied to a triple-leveraged semiconductor ETF, rose 8% while its futures open interest declined 7.4%. The combination points to short covering as a major driver of the price increase, rather than a surge in new long positions.

SKHYNIX, a contract linked to chipmaker SK Hynix, displayed a similar pattern on a smaller scale. Its funding rate fell to 0.0221% from 0.0516%.

Oil contracts continued to show bearish positioning. Oil remained the only asset in the tracked group with negative funding, which deepened to -0.0115% from -0.0077%. At the same time, open interest grew 2.18% as prices advanced 0.86%, suggesting capital was returning after the previous day’s outflows.

Options Traders Continue Hedging Against a Bitcoin Decline

The most-traded Bitcoin options contract over the past 24 hours was a $72,000 put expiring on Dec. 25. Calls accounted for the other four contracts in the top five by volume.

However, Bitcoin’s 25-delta put-call skew remained positive across maturities, indicating continued demand for protection against a price decline. Ether options showed a similar bias toward downside hedging.

Privacy Coins Outperform as DeFi and AI Tokens Slide

Privacy-focused assets performed relatively well, with Dash (DASH) gaining 1.8% and Zcash (ZEC) rising 0.5%.

Zcash co-founder Sean Bowe proposed discontinuing the automatic allocation of 8% of newly issued ZEC to the network’s community grants program. He said the program’s estimated $125 million treasury could fund several years of expenses without continued automatic distributions.

DeFi tokens surrendered their previous session’s gains. Aave (AAVE) declined 3.6%, while Sky (SKY), associated with the project formerly known as MakerDAO, fell 3.9%. Aave’s decentralized autonomous organization has not repurchased tokens since April.

AI-related cryptocurrencies also lost ground despite gains in Asian technology stocks. Render (RENDER), which supports decentralized GPU computing, and The Graph (GRT), a blockchain data protocol, each dropped more than 2%.

Celestia (TIA), Starknet (STRK), and Pump.fun (PUMP) fell around 3%. Tokenomist reported that Celestia is scheduled to unlock 5.58 million TIA tokens on Saturday, potentially adding to supply pressures.

CoinMarketCap’s Altcoin Season Index rose to 57 out of 100 from 53 on Monday, signaling a modest improvement in altcoin performance relative to Bitcoin.