Bitcoin rebounds above $81,000 as Asian chip rally spills into crypto, pepe jumps 9%

Bitcoin BTC$80,690.83 rose around 0.8% since midnight UTC to $81,400 on Monday after dropping below $80,000 on Tuesday. The altcoin market also showed strength, with ether ETH$2,342.29 gaining 0.9% and the CoinDesk Memecoin Index advancing 1.3%.

Asian chip stocks led a rebound in AI shares. South Korea’s Kospi index jumped 6.6% as SK Hynix surged around 11% after reporting a sevenfold jump in profit. Nasdaq-100 index futures gained 0.5%.

The Federal Reserve is due to announce its decision on U.S. interest rates at 18:00 UTC, with CME’s FedWatch tool showing around a 92% chance of no change. Traders will be looking to Chair Kevin Wash’s press conference for clues on whether any increases are on the cards.

U.S. spot ETFs took in $176 million on Tuesday, a second day of inflows, while Alphabet GOOG and Microsoft MSFT report earnings after markets close.

Derivatives Positioning

• Futures activity: Crypto futures trading volume rose 7.5% to $163.2 billion in 24 hours, while open interest (OI) rose only 1.3%. That means the market traded more without taking on much extra exposure. Liquidations jumped 38% to $183.6 million. Taker volume was split 50.7% long and 49.3% short, which is pretty much even.
• BTC and ETH: BTC rose 2.3% while its open interest slipped 0.1%, so the gain did not come with fresh leveraged bets. ETH added 2.7% and its open interest rose 1.7%, which, again, is less than the price move. Funding is positive but mild in both, at 0.0090% for BTC and 0.0079% for ETH, close to the 0.01% baseline, so there are no signs of crowding. BTC and ETH also suffered the largest liquidations, at $56.4 million and $46.0 million, over half of the market total.
• ZEC sees capital inflows: Zcash’s open interest jumped 14% compared with a 6.3% price gain, the clearest sign of new money coming in among larger coins. With funding at 0.0076%, the build-up does not look overheated. Liquidations of $8.6 million were the highest among altcoins.
• Mixed action in gold: Open interest in XAU futures fell 10% even as price edged up 1.4%, a sign that money left the market. Open interest in XAUT, Tether’s gold token, rose 11.6% on a 1.3% price gain, so money came in there.
• Traders lean bearish on crude oil: Open interest in CL, the crude oil front-month future, rose 3.3% while the price slipped 0.7%, and volume surged 26%. Funding is negative at -0.0135%, the most negative among the biggest contracts, so perp traders are leaning short.
• Chip rally: SOXL, a three-times leveraged semiconductor exchange-traded fund, jumped 12%, yet its open interest rose just 2%. SK Hynix rose 8.7% on a 3.9% rise in open interest, and SanDisk gained 7.1% while its open interest fell 1.8%. The rally ran well ahead of new money. Funding is slightly negative for SOXL and SK Hynix and near zero for SanDisk, so the chip rally is not driven by crowded long positions.
• Cumulative volume delta shows bullish sentiment: Most coins have positive 24-hour OI-adjusted CVD. That means market buy orders outweighed market sell orders relative to open interest. XLM has the most positive CVD while, on the negative end, is XAUT.
• Options show bias for puts is easing: On Deribit, the one-week put-call skew for bitcoin tumbled to less than 1% from nearly 10% a week ago. The move shows that demand for puts, or downside protection, is easing. One, three and six-month skews, however, still show a pronounced bias for puts. The $65,000 put expiring on Oct. 30 is the most traded contract of the past 24 hours. For ether, the $3,400 call expiring on Oct. 29 is the most traded.

Token talk

• Pepe PEPE$0.0₅4914, the Ethereum-based frog memecoin, jumped 9.4% to lead the CoinDesk 100 Index on Wednesday. The advance coincided with a report from Arkham Intelligence that wallets it identifies as linked to Tron founder Justin Sun hold around $51 million of the token, making him the largest holder outside exchanges. Floki FLOKI$0.0₄2378 and dogecoin DOGE$0.07943 also rose by 3.4% and 1.9% respecitlvely.
• AI-linked tokens failed to reflect the rebound in AI stocks for a second day, with venice VVV$26.80, the token of a privacy-focused AI platform, falling 8.2%, grass GRASS$0.6352 dropping 3.3% and kite KITE$0.1238 losing 2.4%.
• DeFi tokens also lagged, with CoinDesk’s DeFi Index (DFX) rising by just 0.6% against 0.9% for the CoinDesk 80, the smallest gain of any CoinDesk Index.
• CoinMarketCap’s “Altcoin Season” index rose to 60/100 from 57 on Tuesday.