Nvidia-led tech selloff weighs on crypto majors

Only five of the top 100 cryptocurrencies by market value are up 1% or more over the past 24 hours. That is the state of the market today.

These coins are ARB, RNDR, PEPE, QNT and GT. Most others, including market leaders bitcoin , ether , XRP and solana (SOL), are in the red, while a handful are flat to positive.

This largely risk-off tone can be explained by the prospects of a deeper selloff in tech stocks. NVDA, the AI bellwether and the largest stock by market value, is already down more than 4% in pre-market trading. The reason: On Sunday, CEO Jensen Huang’s accepted having an affair with a suspected Chinese spy, and the company opening an investigation into the matter.

Derivatives Positioning

• Positions closed: Crypto futures trading volume has surged over 200% to $180 billion in 24 hours, recovering from the weekend lull. Meanwhile, open interest (OI) has dropped by 3% to about $127 billion. It shows that traders closed positions and money left the market. Liquidations jumped to $1.1 billion. The taker buy-sell volume ratio, which tracks market orders, leans to selling at 51.5%.
• BTC funding still leans bullish: BTC (bitcoin) open interest fell 0.2% against a 2.2% price drop, a sign of capital inflows amid the price dip. Liquidations were $305 million. Funding is positive but lower than Thursday, which means longs still pay shorts, though less than before.
• Ether funding flips: ETH open interest fell 6.7% against a 5.9% price drop, so money left. Its liquidations were $498 million, larger than BTC’s even though its open interest is half the size. Funding has flipped to negative from positive on Thursday, which means shorts pay longs.
• Capital outflows from top altcoins: Privacy coin ZEC’s futures open interest fell 9.7% against a 4.5% price drop, and XRP (the XRP Ledger’s token) fell 9.2% against a 6.5% drop. A bigger drop in OI relative to price implies capital outflows from the market.
• Volume spike in NVDA perps: Trading volume in Binance-listed NVDA perpetuals surged by over 200% to over $500 million after the company’s CEO Jensen Huang admitted to having an affair with a suspected Chinese spy. The company has opened an investigation into the same.
• Volatility returns: Bitcoin’s one-week implied volatility, the price swings options traders expect, jumped to about 43% from about 33% on Thursday. Ether’s rose to about 60% from about 46%. One-week skew, the extra premium paid for puts over calls, is back to about 13% for bitcoin from about 2%. Ether’s is about 15% from about 7%. Demand for downside protection has returned after the drop.
• Puts lead: Four of bitcoin’s six most active options contracts are puts at strikes $70,000 to $72,000. Ether is split three and three, with its most active contract a December put at $1,900.

Token Talk

• Ether fell 5.9% to $2,100 after closing Sunday below its 200-day moving average for the first time since Aug. 18. It made up about $501 million of the $1.16 billion in crypto liquidations in the last 24 hours, mostly longs.
• XRP was among the worst performers among the top altcoins, losing 7.3% of its value over the same period amid a broader cryptocurrency market drawdown.
• Sector-wise, payments-focused cryptocurrencies are seeing the brunt of the drawdown, losing more than 5% as a category, compared to 3.5% for decentralized finance tokens, 2.35% for memecoins and just 0.12% for layer-two tokens.
• Arbiturum is in fact bucking the sell-off, rising more than 5% in the last 24.hour period as onchain activity surrounding real world assets keep growing.