Cryptocurrency markets opened Monday under selling pressure, with Bitcoin dropping 2.8% in 24 hours to trade below $70,000 amid a volatile weekend. The largest cryptocurrency remains well above its recent lows near $60,000, but has struggled to regain momentum following last week’s steep decline that reignited debate over whether the market has entered a deeper bear phase or is nearing a bottom.

Ether underperformed Bitcoin significantly, falling about 5% to hold above the $2,000 psychological support level. The CoinDesk 5 Index, which tracks the five largest cryptocurrencies, declined 3.4%, while the broader CoinDesk 20 index dropped 3.7%, reflecting a broad-based selloff across major digital assets.

Bitcoin futures markets revealed a significant shift toward bearish positioning. Open interest in BTC futures slid from $19 billion to $16 billion over the past week, marking a period of sustained deleveraging by traders. Funding rates on major exchanges, including Bybit and Binance, have flipped to negative territory, indicating that short sellers are now leading market sentiment.

Options markets confirmed the defensive positioning among traders. The one-week 25-delta skew for Bitcoin rose to 20%, while call dominance dropped to 48%, showing that traders are increasingly purchasing put options for downside protection. The implied volatility term structure entered extreme backwardation, with front-end volatility reaching 85.03% compared to longer-term expectations around 50%.

This massive premium reflects trader demand for immediate protection against near-term price declines. The three-month basis compressed to 3%, signaling that institutional demand has cooled significantly in the derivatives market.

Coinglass data showed $397 million in 24-hour liquidations, with Bitcoin accounting for $234 million of that total.

Ether experienced $74 million in liquidations, while Solana saw $14 million liquidated. Liquidation data indicates a 45-55 split between long and short positions being closed. The Binance liquidation heatmap identified $68,160 as a critical liquidation level to monitor in case of further price declines.

In token market developments, Rainbow wallet’s newly launched RNBW token experienced significant losses following its debut on the Ethereum layer 2 network Base. The token tumbled to $0.025, representing a 75% decline from its $0.10 initial coin offering price just two months prior, though it later recovered to $0.031.

See also: Zcash Dips 6.62% as Liquidation Imbalance Reaches 1,374% in 12 Hours

The sharp decline wiped out speculation surrounding a $100 million fully diluted valuation, with the project’s current valuation hovering closer to $31 million. Rainbow co-founder Mike Demarais attributed the launch turmoil to backend infrastructure issues, as the platform struggled to handle demand during token distribution.

Distribution delays meant that some users did not receive their airdropped tokens for hours after launch. U.S.-based investors face additional restrictions, with token access locked until December 2026 under the wallet’s vesting schedule.

Rainbow previously raised $18 million in a 2022 Series A funding round led by Seven Seven Six, the investment firm founded by Reddit co-founder Alexis Ohanian.

If you’re reading this, you’re already ahead. Stay there, by joining the…

Dipprofit’s private Telegram community.