Volatility in the crypto market came to a grinding halt on Friday with all of the major CoinDesk indexes moving by less than 1% since midnight UTC.
The damping comes as bitcoin, crucially, remains higher than $94,500, the level it broke out above earlier this week after being confined to range-bound trading since November.
Zcash (ZEC), aptos (APT) and polygon (POL) all posted marginal declines, while dash (DASH), a privacy-focused payments token, continued its barnstorming start to the year by rising 15% to add a 141% surge over the past week.
The market is now awaiting its next catalyst as political turmoil in Iran and Venezuela put crypto’s “safe haven” narrative back on the map, demonstrating by divergence between crypto and U.S. equities, which lagged behind the likes of BTC and ETH this week.
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Exchanges have liquidated close to $240 million in leveraged crypto futures bets. The market-wide futures open interest has pulled back to $143 billion from $146 billion, a sign of pause in demand for leveraged products.
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BTC’s volatility meltdown continues. Volmex’s 30-day implied volatility gauge is now pricing around a 2.5% average daily move over four weeks.
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ETH’s 30-day implied volatility dropped to its lowest since early 2024.
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ZEC’s futures open interest dropped by 14% in 24 hours, leading capital outflows in almost all major tokens, including bitcoin, ether, solana and XRP. Monero (XMR) stands out with an 8% increase in open interest.
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ZEC’s annualized funding rates crashed to -50%, a sign of heightened demand for bearish, short positions. It also points to overcrowding in bearish plays, which often sets the stage for a short squeeze higher.
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Block flows in the options market featured a large short position in bitcoin’s $112,000 call expiring on Feb. 6. It could have been raised against a long position in the spot market, a covered call strategy aimed at generating additional yield on top of the spot market holding.
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In ETH’s case, block flows featured a bias for the iron condor strategy, which is used to profit from a rangebound market.
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DASH led the way once again on Friday, rising more than 15% since midnight UTC while the rest of the altcoin market remained cool after experiencing a period of upside at the start of the week.
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This could be viewed as a positive for the broader altcoin market as DASH was the early mover during Asia trading on Tuesday, hours before the rest of the market staged a breakout.
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Tezos (XTZ) also showed strength, jumping by 8.3% from a morning low of $0.57 to $0.62.
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The CoinDesk 80 Index (CD80), which tracks a wider basket of altcoins, is in the black by 0.68% since midnight while the CoinDesk 20 (CD20) is little changed, indicating relative strength among altcoins while the majors consolidate.
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Traders will be keeping an eye on the U.S. market open to see if traditional markets could spark some volatility heading into the weekend — typically a period of low volume and liquidity.