Altcoins climb as bitcoin and ether retreat from weekly highs

The crypto market dropped back on Thursday with bitcoin losing around 0.7% since midnight UTC following Wednesday's rally to a three-month high of $82,800.

Ether lost around 1% during Asia and European hours, now trading at $2,325 having briefly topped $2,420 on Wednesday.

The broader market is showing early signs of a bullish reversal following a two-month consolidation pattern between February and April, although it's worth noting that bitcoin needs to break $98,000 in order to break its current cycle of lower highs and lower lows.

The altcoin market continues to indicate investor rotation, with the likes of ALGO and $TON rising by between 8% and 9% since midnight UTC.

U.S. equity futures are flat on Thursday while the dollar index (DXY) is down by around 0.1% as investors remain hopeful over a deal to end the war in Iran.

Derivatives positioning

Crypto futures market activity remained relatively subdued over the past 24 hours, with total futures volume rising just 3% to $216 billion, while aggregate open interest (OI) declined 3% to $133 billion. The divergence between suggests that positioning is being reduced rather than expanded, pointing to deleveraging across the market.

$BTC open interest fell to 762K $BTC from 793K $BTC a day earlier, ending a three-day streak of sustained positioning growth. Among major assets, $DOGE recorded the sharpest decline in OI, down 6%, while $XRP OI slipped roughly 1%. The declines across these assets suggest capital outflows and reduced speculative appetite in the near term.

$DOGE positioning appears particularly weak. Funding rates remain negative at an annualized rate of around 6%, indicating that short positions are paying longs to maintain exposure. At the same time, $DOGE’s 24-hour cumulative volume delta (CVD) is the most negative among major tokens, signaling aggressive selling pressure from market participants using market orders.

$BTC funding rates, meanwhile, remain broadly neutral after averaging around minus 4% annualized in recent weeks. The normalization in funding suggests that excessive bearish positioning has largely been flushed out of the market. Some observers view this reset as constructive for $BTC price action.

In contrast, $ETH and SOL both recorded OI increases of 1% or more despite weakening spot prices. Rising open interest alongside falling prices typically suggests fresh short positioning is entering the market, indicating traders may be positioning for additional downside in these tokens.

$TON continues to stand out on the positioning front. Open interest climbed more than 10% to another record high, signaling continued capital inflows into the asset. $TON’s price briefly reached $2.90 earlier today, its highest level since September, and the token is now up 93% on the week. The simultaneous rise in both price and OI points to strong directional participation.

$TON, TRX, and ZEC are currently the only top-30 tokens posting OI-adjusted positive cumulative volume delta readings. This suggests buyers are driving trading activity through aggressive market orders rather than passive limit bids. Most other major assets, including $BTC, $ETH, and $XRP, continue to show negative CVD readings.

In the options market, bullish sentiment remains evident on Deribit, where call options at strike levels above $80,000 continue to dominate 24-hour volume rankings. According to Glassnode, dealers with short gamma exposure may buy into a potential $BTC move above $82,000 to maintain hedges. That could further add to momentum.

Meanwhile, the one-month volatility risk premium, which measures the gap between implied volatility (IV) and realized volatility (RV), has turned positive again, per Glassnode. This shift indicates renewed demand for short-dated optionality and suggests traders are increasingly willing to pay for near-term volatility exposure after a prolonged period of compressed expectations.

Token talk

CoinDesk's DeFi Select Index (DFX) and the CoinDesk MemeCoin Select Index (CDMEME) are the best performing benchmarks on Thursday, rising by 2.5% apiece as speculative trading begins to come into effect.

The Bitcoin-weighted CoinDesk 5 (CD5) and CoinDesk 20 (CD20) indices are flat since midnight UTC, while the broader CoinDesk 100 (CD100) was also marginally in the red.

CoinMarketCap's "altcoin season" indicator is now at 45/100, its highest level since late March having risen from 32/100 since this time last month.

Despite the wider altcoin market being optimistic, popular DeFi token MORPHO lost 4.6% of its value since midnight UTC and 6.1% over the past 24 hours. it is currently trading at $2.13 with investors taking profits following a rally earlier in the week that lifted it from $1.95 to $2.33.