Traders Turn Bearish as Zcash, Hyperliquid Tokens Extend Losses Ahead of Bitcoin Move

Crypto markets are under continued pressure ahead of key U.S. inflation data due Wednesday, with expectations that May CPI could show inflation climbing above 4%.

Weakness is broad-based across altcoins. Zcash (ZEC) and Hyperliquid’s HYPE token have each dropped more than 10% in 24 hours, while ADA, ONDO, and BCH are down over 4%. The CoinDesk 20 Index also slipped around 3% over the same period.

Bitcoin (BTC) has retreated below $61,500, giving back much of its weekend rebound that briefly pushed prices above $64,000 on some exchanges. The move also puts BTC back below its 200-week simple moving average, a long-term technical level closely watched by traders.

FxPro analyst Alex Kuptsikevich noted that historically, sustained trading near this level has often been associated with extended bear phases lasting several months.

Derivatives markets lean defensive

Crypto futures activity shows mixed but cautious positioning. Total futures volume rose 1.2% to $193 billion, while open interest fell 1.5% to $102.27 billion. Liquidations jumped 38% to $418 million, with longs accounting for more than $300 million of forced exits as prices slid toward $61,000.

Bitcoin futures open interest rose to 728,000 BTC despite falling prices, suggesting fresh short positions are being added as traders position for further downside.

Negative funding rates and negative volume delta further confirm the bearish tone, indicating aggressive selling into bids rather than passive accumulation.

Solana futures open interest also increased to 69.58 million tokens, nearing recent highs, while funding and volume indicators remain negative—mirroring broader market stress.

Across major assets including ETH and XRP, funding rates remain negative, with XMR standing out as the only token showing mild positive momentum.

Bitcoin’s 30-day implied volatility rose to 51.21% from 45.8%, reflecting rising uncertainty ahead of CPI. Ether volatility has also edged higher.

On Deribit, short-dated BTC and ETH puts continue to trade at a premium over calls, signaling persistent demand for downside protection. One-week implied volatility also remains elevated relative to realized volatility, favoring options buyers.

A July options structure suggests traders expect range-bound price action, with limited conviction in a strong directional move.

Token flows and distorted signals

Uniswap V4’s total value locked appeared to spike more than 350% in a single day, driven by apparent inflows on BNB Chain. However, the move was later traced to distorted data caused by the hacked Humanity Protocol H token, which was minted in unlimited supply and artificially inflated liquidity figures.

Separately, Santiment said crypto markets are approaching a historically attractive buy zone based on 30-day MVRV data. It shows recent buyers are underwater across major assets: bitcoin (-10%), ether (-12%), XRP (-8%), and cardano (-18%). The firm classifies most of these as “fair buy” conditions, with cardano marked as a “strong buy.”

In token-specific news, MORPHO rose 12% after its onchain lending protocol raised $175 million in a major funding round led by Paradigm, a16z crypto, and Ribbit Capital, with participation from Apollo and VanEck. The deal valued the protocol at up to $2 billion, though gains later partially faded.