Altcoins rally on softer dollar as bitcoin stabilizes

Altcoins rallied as the U.S. dollar slid to a four-year low, while bitcoin held steady and ether softened.

The Dollar Index (DXY) dropped to its weakest level since 2021 on Tuesday, breaking below a long-term trendline that has been in place since 2011. The move came despite President Donald Trump’s efforts to reassure markets, saying the dollar was “doing great” and that he was not “concerned.”

Bitcoin traded little changed on Wednesday after posting gains the previous session as the dollar weakened. Ether gave up some of its recent advance, while momentum shifted into other areas of the altcoin market.

Hyperliquid’s HYPE token extended its rally, rising 11% since midnight UTC. Solana-based liquid staking token Jito (JTO) jumped 32%, marking its largest single-day gain since December 2023, according to CoinDesk data.

Movements in the dollar remain a key driver for crypto markets, where most assets are priced against the U.S. currency. The inverse relationship was particularly evident during the last bear market, when the dollar surged about 22% between November 2021 and October 2022 as bitcoin fell more than 70%.

Derivatives positioning

The shakeout in leveraged positions continued, with roughly $230 million in bullish crypto futures liquidated over the past 24 hours. The steady clearing of long positions has been ongoing since Monday.

Despite the liquidations, volatility expectations remain subdued. One-day and 30-day implied volatility measures for bitcoin and ether remain under pressure, suggesting traders are not positioning for significant price swings ahead of the Federal Reserve’s interest-rate decision.

Futures positioning in HYPE expanded sharply. Notional open interest rose more than 20% in dollar terms over the past day, largely reflecting price appreciation, while open interest measured in tokens remained broadly stable near 57 million HYPE.

Open interest in bitcoin, ether, XRP and BNB futures increased between 2% and 4%. With the exception of ZEC and TRX, annualized funding rates across major tokens remain positive, pointing to a continued bullish bias.

In options markets, bitcoin and ether puts on Deribit continue to trade at a premium to calls. Demand has increased for bitcoin downside protection at the $85,000 strike. Block trades in bitcoin options were mixed, with interest in both call and put spreads, while ether traders favored straddles and risk reversals.

Token talk

While HYPE and JTO ranked among the strongest performers, the largest gain came from PIPPIN, a Solana-based memecoin and autonomous AI agent created by AI innovator Yohei Nakajima. The token surged 64% over the past 24 hours and was the most accumulated asset by “smart money” wallets, according to Stalkchain.

Other decentralized exchange tokens also posted gains. Jupiter (JUP) rose 3.1% since midnight UTC, extending its 24-hour gain to 10.9%, while Aster (ASTER) climbed 5.7% from Tuesday morning to trade near $0.69.

Market indexes reflected the broader altcoin strength. The bitcoin-heavy CoinDesk 20 Index rose 2.47% over the past 24 hours and is up 2.38% year to date. The altcoin-focused CoinDesk 80 Index outperformed, gaining 3.7% on the day and 7.3% since Jan. 1.

The positive tone across altcoins comes as bitcoin remains locked in a narrow consolidation range—a market environment that has historically favored higher-beta tokens as traders rotate into more speculative assets while waiting for a clearer directional signal from bitcoin.