Crypto Flight to Quality Lifts BTC and ETH as Traders Avoid Riskier Tokens

Bitcoin and ether remain the only CoinDesk 20 cryptocurrencies trading in positive territory, as investors appear to be favoring major assets while smaller altcoins lose momentum.

Bitcoin gained around 0.9% over the past day, reaching approximately $64,700, while the broader CoinDesk 20 (CD20) index increased only 0.16%. Despite record highs across major stock markets, the positive sentiment in equities has not translated into a wider crypto rally.

The current market trend suggests traders are rotating toward the largest and most established cryptocurrencies. Bitcoin and ether are the only CD20 members showing gains, while altcoins continue to struggle. Zaheer Ebtikar, chief strategy officer at crypto neobank Plasma, said many alternative tokens are facing pressure due to a lack of strong follow-through from bitcoin’s momentum.

Ebtikar noted that altcoin open interest has fallen roughly 15% over the past month, while bitcoin has advanced about 8%. CoinMarketCap’s Altcoin Season Index also declined to 42 out of 100, signaling weaker performance across the altcoin market.

He said bitcoin’s growing connection with traditional finance through spot ETFs, basis trading, institutional hedging and collateral markets has helped create a more durable demand structure. Unlike many altcoins, bitcoin does not require a major price rally to attract institutional participation.

Most alternative cryptocurrencies, however, have not reached the same level of financial integration. Ebtikar said many projects still lack a clear explanation of how value accumulates for token holders, making them less attractive during periods of market uncertainty.

AI sector weakness impacts broader risk appetite

Technology stocks showed signs of pressure, with the Nasdaq 100 declining even as the S&P 500 and Dow Jones Industrial Average moved higher. The market reaction followed SpaceX’s first earnings release since its public listing in June.

Investors reacted negatively to the company’s sharp increase in artificial intelligence-related spending, pushing shares down 13% before the close. The AI investment boom has often been linked to capital moving away from crypto, and any cooling in that trend could potentially bring renewed attention to digital assets.

Derivatives market signals mixed

Bitcoin leverage improves but needs sustained growth:
Crypto futures positioning became more optimistic, with the long-short taker volume ratio turning positive for the first time in at least a week. Long positions accounted for nearly 52% of activity, showing increased buying pressure.

Bitcoin futures open interest rose to around 770,000 BTC. However, similar increases since early June have been temporary, with open interest previously dropping back toward 740,000 BTC or lower after brief spikes. A continued increase would be needed to confirm stronger confidence and renewed leverage demand.

Other market indicators, including perpetual funding rates and open interest-adjusted cumulative volume delta (CVD), remain supportive of bitcoin’s bullish case.

XRP faces downside pressure despite higher open interest:
XRP futures open interest increased by about 5% in the past 24 hours to 2.23 billion tokens, while the token price declined to $1.04, its weakest level since early July.

The divergence between rising open interest and falling prices is often viewed as a bearish signal, suggesting traders may be positioning for additional declines. Negative perpetual funding rates and weak CVD readings further point to cautious sentiment around XRP.

Ethereum remains quiet as Solana leverage continues to fall:
Ethereum futures activity remains subdued, with open interest staying below 14 million ETH and showing little change. Solana has continued to see positions unwind, with futures open interest falling to 60.81 million tokens after reaching above 76.5 million on June 24.

Equity-linked crypto contracts remain popular:
Some of the most actively traded perpetual futures contracts over the past 24 hours were tied to traditional stocks, including SNK, SPCX and SKYHYNIX. Their popularity alongside bitcoin and ether contracts highlights continued demand for trading traditional assets through crypto-based markets.

Major cryptocurrencies show mixed buying pressure:
CVD data reveals a split market. Bitcoin and ether recorded positive 24-hour CVD readings, indicating stronger aggressive buying, while SUI, XLM, DOGE, AVAX and XRP showed negative figures, reflecting weaker demand.

BTC and ETH volatility remain stable:
Bitcoin implied volatility has remained steady, with the BVIV index holding near 36%. Historically, this level has often moved back toward its average. Ether volatility has followed a similar pattern.

Options traders position for potential upside:
Bitcoin options activity shows growing demand for bullish call contracts at higher strike prices, including $80,000 and $96,000 levels. For ether, the $2,000 call option was the most actively traded contract during the last 24 hours.

NEAR’s AI-compute strategy put to the test

NEAR traded at $1.68 on Thursday, falling 1.8% over 24 hours after reaching an intraday high of $1.73. The token’s market capitalization stands near $2.19 billion, but its price has not reflected the network’s growing focus on AI computing.

The project recently introduced an AI-compute staking system that allows users to lock NEAR tokens to provide computing resources for artificial intelligence applications. The goal is to tie token demand to actual network usage instead of relying on governance or speculative interest.

Leo Fan, CEO of Cysic, said the key challenge is whether the system can generate genuine demand.

He explained that while stake-to-compute models offer a stronger utility case for tokens, early participation can often be driven by incentives rather than real developer needs.

Fan said investors should track three main factors: how much of the available computing capacity is being used, whether workload demand continues growing, and if developers remain willing to pay once incentive programs decline.

If AI developers continue using the network after incentives are reduced, the model could prove sustainable. However, if activity disappears once rewards decline, it would indicate that adoption was mainly driven by incentives.

NEAR’s performance will serve as an important test for the broader AI-crypto sector, as projects attempt to connect token value with real-world computing demand rather than speculation alone.