Bitcoin Hits Four-Week High: Altcoins Struggle as Traders Eye Market Risks

What to Know

• Bitcoin (BTC) briefly surged to $93,350 at the start of CME futures trading, opening a gap between $90,500 and $91,550.
• Altcoins showed mixed performance, with LIT and FET gaining, while meme and metaverse coins declined.
• The average crypto RSI is near 58, indicating overbought conditions and a potential short-term correction.

Bitcoin Leads Market Rally

The crypto market began the week on a positive note, led by Bitcoin. BTC climbed to $93,350, its highest level since December 11, before giving back some gains. Most of the price movement occurred around midnight UTC, coinciding with the opening of CME Bitcoin futures, which created a trading gap between $90,500 and $91,550.

Historically, such gaps tend to be filled within a few days, suggesting BTC may revisit the $90,500 level in the near term.

Investor attention remains concentrated on Bitcoin, which has risen 1.33% since midnight, while altcoins lagged behind. Metaverse (MTVS) index fell 2.3%, signaling cautious sentiment among traders. Equities and precious metals also experienced gains overnight, reflecting a broader risk-on environment following recent U.S. developments in Venezuela.

Derivatives Activity Highlights

Derivative metrics reveal selective optimism in the market:

• Liquidations: Approximately $260 million in leveraged crypto futures were liquidated over the past 24 hours, mostly from short positions, which were caught off guard by Bitcoin’s surge.

• Open Interest (OI): BTC, BCH ($651.20), XRP, and BNB experienced 2–5% increases in OI, whereas ETH, SOL, DOGE, and ZEC showed flat or declining OI, suggesting concentrated demand.

• Cumulative volume delta: Excluding BTC, BCH, BNB, and XLM, the top 20 coins saw net selling pressure, reflecting uneven altcoin support.

• Funding rates: BTC’s annualized perpetual funding rates topped 10%, signaling growing bullish sentiment. Most altcoins remain below zero.

• Options flows: Deribit data indicates a weaker put bias for BTC, with traders targeting $100,000 calls, while ETH options showed call spread activity.

Altcoins: Winners and Losers

Altcoins displayed fragmented performance amid Bitcoin dominance:

• Top performers:

  • LIT: +3.9% since midnight, benefiting from perpetual exchange adoption.

  • FET: +7.4%, extending its weekend rally fueled by AI-related demand.

• Underperformers:

  • ZEC: -2.5%

  • DOGE: -1.4%

  • PEPE: -4.5%

This mixed performance highlights trader indecision and the ongoing liquidity shortage affecting the altcoin market since October’s liquidation events.

Read more: Unlocking the Potential of FET: Fetch.ai’s Native Token

Technical Outlook

The average crypto RSI is currently 58/100, entering overbought territory. This indicates that a short-term correction is possible as traders may take profits.

The CME futures gap between $90,500 and $91,550 remains a key support zone. BTC retesting this area could provide trading opportunities, while altcoins may continue to experience choppy, selective gains.

Market Summary and Outlook

• Short-term (1–7 days): BTC may fill the CME futures gap, while altcoins remain volatile.

• Medium-term: Sustained BTC momentum could support select altcoins like LIT and FET if institutional inflows increase.

• Risks: Overbought RSI, low liquidity, and sudden macroeconomic or geopolitical events may trigger temporary pullbacks.

In conclusion, Bitcoin continues to lead market sentiment, while altcoins show uneven performance. Monitoring support/resistance levels, derivative flows, and funding rates will be crucial for traders navigating ongoing market volatility.

Frequently Asked Questions (Q&A)

Why did Bitcoin outperform altcoins this week?

BTC’s surge to $93,350 was driven by CME futures activity, strong derivatives positioning, and increased investor confidence. Altcoins lagged due to lower liquidity, profit-taking, and sector-specific risks.

Q2: What does the RSI indicate for short-term Bitcoin movements?

A: With an RSI near 58, Bitcoin is entering slightly overbought territory. Short-term corrections are possible as traders lock in gains, but the trend remains bullish.

Which altcoins are showing strength?

Tokens like LIT and FET outperformed, benefiting from specific project developments and weekend rallies. Investors are closely watching AI-focused and exchange-native tokens.

Are derivatives influencing the market?

Yes, BTC futures liquidations and rising perpetual funding rates indicate heightened bullish exposure. Open interest trends suggest risk appetite is improving for select assets.

What should traders watch this week?

Monitor CME futures gaps, altcoin liquidity, RSI levels, derivatives flows, and broader macro factors like equities or geopolitical events impacting market sentiment.