Crypto Market Sinks: $1.5 Billion Leveraged Bets Liquidated

The cryptocurrency market experienced significant losses early Monday, leading to the liquidation of leveraged bets totaling $1.5 billion. This downturn followed a Fed interest-rate cut that was expected to lower the dollar index and boost risk-taking in crypto markets.

Bitcoin (BTC) fell out of an upward channel established since early September, dropping below horizontal support and the 50-day moving average, signaling potential further declines unless market sentiment shifts.

Derivatives Positioning

Most top tokens, except BTC and HYPE, saw double-digit declines in futures open interest as overleveraged positions were liquidated.
Binance-listed USDT futures showed increased open interest for short positions with near-zero funding rates.
Funding rates for TRX, ADA, LINK, TON, UNI, and 1000SHIB futures are notably negative, indicating bearish sentiment.
BTC front-month futures on the CME trade at a $100 premium to spot price, with potential for discount indicating selling pressure.
On Deribit, put premiums relative to calls have increased, reflecting demand for downside protection.
Sentiment in XRP and SOL options has turned bearish, aligning with BTC and ETH markets.

Token Talk

Altcoins like PUMP, RAY, CRV, and TIA faced double-digit declines, hitting monthly lows.
A $1.6 billion liquidation cascade worsened the sell-off, with $500 million from ether (ETH) trading pairs.
ETH funding rates flipped negative, indicating a shift in sentiment after a rally from July to August highs.
Crypto majors such as BTC, ETH, and SOL are at support levels; sentiment's bearish turn could lead to a recovery targeting aggressive short positions.
The average crypto token RSI is 28.4, suggesting oversold conditions that might lead to a relief rally unless ETH and BTC break support levels.