Metals Shine as Crypto Dims: The Unlikely Duel of Money’s Newest Phases

by

Markets

What to know:

  • A shocking twist in the drama of digital coins: Bitcoin and ether have taken a rather uninspired tumble, their volumes plummeting by over 20%. One might say they’ve decided to take a leisurely stroll within a range-bound prison.
  • Meanwhile, gold has donned its crown, hitting a record high while silver’s volumes on HyperLiquid flirt with those of major crypto assets. Who knew precious metals had such a flair for the dramatic?
  • Amidst this metallic renaissance, HyperLiquid’s HYPE, along with privacy coins and memecoins, have stepped into the limelight as unexpected stars, outperforming their more established crypto counterparts.

As Tuesday waltzed in, the crypto market continued its narrow tango, constrained by low volume and liquidity, like a dancer whose partner has mysteriously vanished.

In the last 24 hours, bitcoin’s trading volume has plummeted by 25% to a mere $35 billion, while ether shrank by 21% to $24.6 billion. A decline so pronounced, one might think the coins were on a diet.

This lull in volatility can be attributed to the crypto market’s collective shrug, occurring simultaneously with a euphoric rally among precious metals, as if they were inviting digital currencies to a party they didn’t want to attend.

Gold is now frolicking at $5,085, having achieved a series of record highs this past week, while silver has surged over 57% since January. It seems traders have found their safe haven, or perhaps just a glittery distraction.

The shift towards metals is palpable on derivatives exchange HyperLiquid, where silver futures are flirting with $1 billion in daily volume-an impressive feat overshadowed only by the giants, bitcoin and ether. However, a negative skew in funding rates hints at traders shorting into strength, which is like placing bets on a horse that’s already crossed the finish line.

In the backdrop, U.S. President Donald Trump has issued fresh tariffs on South Korea, following a political duel with the EU over Greenland. Risk-off sentiment may linger longer than an unwelcome guest at a dinner party.

Derivatives

  • It was a rough 24 hours, with over $270 million in leveraged crypto futures bets liquidated. The bears came out to play, with shorts dominating, as traders expected a deeper market plunge after last week’s 7% decline in bitcoin-but lo and behold, they were caught off guard by a bounce from $86,000 to nearly $88,000. Surprise!
  • Volmex’s 30-day implied volatility indices for bitcoin and ether cling to near-multimonth lows, indicating a tranquil sea devoid of panic, even as the technical charts depict a bearish storm brewing.
  • Open interest (OI) in futures linked to HyperLiquid’s HYPE token surged by 30%, approaching December’s record high. Meanwhile, the decentralized exchange seems to have snatched market share from rivals Aster and Lighter, proving once again that competition is alive and well.
  • OI in ETH, SOL, XRP, and DOGE has seen modest gains of 2% to 3%, while BTC stubbornly holds flat, like a deflated balloon at a party.
  • Annualized perpetual funding rates for most majors remain moderately positive, hinting at a bullish bias, but not enough to cause any real ruckus. Rates for TRX and DOGE have turned negative, suggesting a reign of shorts has taken hold.
  • On Deribit, BTC and ETH puts trade at a premium to calls, signaling lingering fears of decline. Some observers suggest downside protection has become a popular trade, making calls look relatively cheap for those harboring bullish dreams.
  • Bearish directional positioning, such as put spreads and straddles, now accounts for nearly 50% of all BTC block trades over 24 hours. In ETH’s case, traders prefer the iron condor strategy, aiming to profit from what looks to be a rather cozy range-bound market.

Token talk

  • Surging volumes on the silver futures market have buoyed HYPE by over 22% in the past 24 hours, as trading volumes more than doubled to a staggering $510 million. Silver lining, indeed!
  • Privacy coins zcash and monero have risen by 4% and 3%, respectively, since midnight UTC, while bitcoin and its major companions ETH, XPR, and SOL have slipped by 0.4%-1%. The irony-how delightfully tragic!
  • Pump.fun’s native PUMP token has soared by an astonishing 14.5% since midnight as traders navigate the turbulent waters of the memecoin market, extracting value amidst the broader market stability.
  • January’s trading volume on Pump.fun has already surpassed $10 billion-reaching heights unseen since June, with four days still left to go. Ah, the thrill of speculation!
  • CoinDesk’s dominant CoinDesk 20 Index remains relatively unchanged since the year began, while the CoinDesk 80, heavily weighted towards altcoins, has climbed by 3.6%. A tale of two indices, neither particularly riveting.

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2026-01-27 15:55