Crypto markets are experiencing significant pressure ahead of pivotal U.S. inflation data, with bitcoin trading back below $61,500 and below its 200-week moving average. According to reports from CoinDesk, this technical level has historically been associated with prolonged bear markets, as analysts note the average time spent near this level is almost 11 months. The CoinDesk 20 Index fell 3% in the recent period, with privacy-focused zcash (ZEC) and decentralized exchange Hyperliquid's HYPE each dropping over 10% in 24 hours, while other tokens including ADA, ONDO, and BCH fell more than 4%. Recent market data shows DoubleZero (2Z) trading at $0.06898, reflecting broader crypto market weakness across all token categories.
Derivatives positioning reveals growing bearish sentiment across major tokens, with crypto futures volume rising 1.2% to $193 billion while open interest fell 1.5% to $102.27 billion. As reported by CoinDesk, liquidations jumped 38% to $418 million, with longs accounting for more than $300 million of the total as bitcoin slid back toward $61,000. Bitcoin futures open interest increased to 728,000 BTC from 712,000 BTC, indicating fresh short positioning despite the price decline. The bearish sentiment is reinforced by negative perpetual funding rates and negative OI-adjusted 24-hour cumulative volume delta, suggesting sellers are hitting bids at market rather than placing passive limit orders.
The crypto market pressure stems from expectations of pivotal U.S. inflation data, with reports indicating the cost of living is expected to have risen to a three-year high of over 4% in May. According to CoinDesk, this data release is creating uncertainty in the cryptocurrency markets, with bitcoin's 30-day implied volatility index rising to 51.21% from 45.8% on Monday. The volatility increase reflects renewed uncertainty ahead of the U.S. CPI release, with ETH's implied volatility also ticking higher, indicating broad market anxiety about the economic data.
Several tokens experienced notable movements, with Morpho's token rallying after raising $175 million in one of the largest funding rounds in DeFi history, co-led by Paradigm, a16z crypto and Ribbit Capital. As reported by CoinDesk, the deal was structured as a token purchase and valued the protocol at up to $2 billion. However, Uniswap V4's total value locked appeared to explode more than 350% in a day, with DefiLlama showing roughly $2 billion of apparent inflows concentrated on BNB Chain. This spike was later traced to the Humanity Protocol's H token, which was hacked and minted in unlimited supply, inflating dashboard figures rather than representing real deposits.
Market sentiment indicators suggest potential for a bottom formation, with Santiment reporting that the broader market selloff has reached a historic buy zone. According to Santiment's analysis, the 30-day market value to realized value (MVRV) shows bitcoin underwater by 10%, ether by 12%, chainlink by 9%, XRP by 8%, and cardano by about 18%. The firm tags the first four tokens as 'fair buy' and cardano as 'strong buy', suggesting that current price levels may represent attractive entry points for investors willing to weather the current volatility.
