Crypto markets plunged toward April lows on Friday as a persistent liquidity crunch intensified volatility. Bitcoin (BTC $87,058.50) and Ether (ETH $2,934.13) each fell roughly 10% over 24 hours, with BTC trading near $82,200 and ETH around $2,700.
Altcoins were hit harder, with some tokens losing up to 20%. The CoinDesk 20 Index (CD20) dropped 10%, while the CoinDesk 80 Index fell 12%, leaving all constituents in negative territory.
Liquidity and Market Pressure
The sell-off traces back to October’s liquidity crunch and liquidation event, which left markets thin and prone to sharp swings. U.S. equities also faced pressure, with the Nasdaq 100 now 9.4% below its October 31 record high.
Derivatives and Volatility
- Bitcoin’s 30-day implied volatility (BVIV) surged past 64%, and Ether’s volatility index climbed to 87%, the highest since April 10.
- Open interest in BTC dropped to 700K BTC from 752K BTC, as leveraged bullish positions were liquidated. Some traders attempted to “catch the falling knife” by buying futures amid the decline.
- Open interest across altcoins also fell sharply, with DOGE, ENA, and ASTER down more than 15%.
- Deribit options data show a strong bias toward puts, with 46% of BTC block flow in put spreads. ETH options exhibited similar activity. Notably, some traders purchased deep out-of-the-money IBIT puts at the $15 strike.
Altcoin Market and Sentiment
Altcoins suffered severe losses, with multiple tokens hitting multimonth lows. The Crypto Fear & Greed Index fell to 11/100, the lowest since June 2023.
Bitcoin and Ether were not spared, each losing around 10%, though the average crypto RSI is in oversold territory, suggesting a potential short-term relief rally.
Despite widespread losses, some traders profited. Two traders earned a combined $1.3 million by sniping Jesse Pollak’s creator coin, JESSE, purchasing tokens in the same block as their deployment, according to Arkham Intelligence.
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