Altcoin trading activity surges amid stagnant prices for top digital currencies

Crypto majors bitcoin and ether ($ETH) head into the weekend having been confined to a tight trading range over the past four days, with $BTC being trapped between $76,100 and $78,000.

The lack of volatility has led to little pockets of the altcoin market benefitting from the speculative nature of crypto investors. The AI sector was the recipient of such speculation on Friday as $NEAR increased by 28.5% while FET posted an 11.4% gain in the past 24 hours.

Conversely, privacy coins DASH, ZEC and XMR experienced a wave of sell pressure on Friday, eroding much of their early week rally, indicating that sector rotation is in full effect.

Brent crude oil dropped to $102 per barrel on Friday, down from $112 seen earlier this week as speculation swirls around a potential peace deal between Iran and the U.S.

U.S. equities responded well to the drop off in oil; Dow Jones Industrial Average closed at a record high on Friday, while Nasdaq 100 and S&P 500 are now up by 3% and 1.7% respectively since Tuesday's low, suggesting a return to risk-on sentiment.

Derivatives positioning

Crypto futures market-wide volume rose modestly by 1% to $160 billion in the last 24 hours, while notional open interest (OI) remained stable near $128 billion. Liquidations declined sharply by 26% to $200 million. This setup reflects a calmer market with reduced forced liquidations, even as volume growth remains relatively muted.

Today's standout token is Near Protocol's $NEAR, which has gained over 25%. With the price rise, OI in futures tied to the token has surged to a record high of 282.53 million tokens. The OI-adjusted 24-hour cumulative volume delta is positive, a sign of aggressive buying at market orders rather than passive limit orders. This validates the upswing in prices. And last but not least, funding rates remain mildly positive, suggesting healthy leverage conditions and no overheating.

Markets tied to TRX and LINK display a similar bullish profile, characterized by OI growth, positive CVDs and positive funding rates.

The bitcoin market offers little excitement, with OI steady in the recent 720K $BTC to 750K $BTC range. The same can be said for ether.

Both $BTC and $ETH's annualized 30-day implied volatility indices continue to slide. That's a sign of relentless volatility selling via options, mostly call overwriting.

On Deribit, bitcoin puts at strikes ranging from $71,000 to $77,000 dominate the 24-hour volume rankings. Similar volume concentration is seen in ether puts. A put option offers protection against price losses in the underlying asset.

Token talk

CoinDesk's DeFi Select Index (DFX) was up by 1.1% on Friday, outperforming the CoinDesk Smart Contract Platform Select Capped Index (SCPXC), up by just 0.3%, and the CoinDesk Memecoin Select Index (CDMEME) after it tumbled by 1%.

The altcoin market was generally a mixed bag on Friday; XRP, SOL and $ETH all lost ground alongside the privacy coin sector while the likes of $HYPE and ATOM continue to show relative strength, with the later posting a 5% gain since midnight UTC.

$HYPE, the native token of perpetual exchange HyperLiquid, has been its own animal this week - rising to a barnstorming record high after surging by around 60% since Tuesday.

The move comes alongside heavy short interest and a wave of liquidations coupled with institutional participation following the launch of spot ETFs in the U.S. this month.

CoinMarketCap's "altcoin season" indicator rose from 31/100 to 38/100 this week, buoyed by $HYPE's strong performance.