Bitcoin slides to $68K as Nasdaq correlation turns positive; memecoins lead altcoin losses
Bitcoin fell to about $68,000 (down ~1.25%) as a tech-led risk-off move weighed on markets and gold corrected ~2.4%. BTC’s correlation with the Nasdaq flipped from -0.68 to +0.72 since Feb. 3, signalling stronger linkage to tech stocks. Memecoins PEPE, DOGE and TRUMP led altcoin declines (roughly -3.5% to -4.5%), while AI token MORPHO (+23.5% weekly) and privacy coin ZEC (+19% weekly) outperformed. Derivatives show capital outflows: industry notional open interest fell 1.5% to $93B, and $229B of leveraged positions were liquidated in 24 hours, mostly long bets. Open interest in futures for DOGE, PEPE, LINK and AVAX dropped 3–5%; HYPE futures cooled to multi-week lows. Implied volatility for BTC and ETH pulled back from monthly highs, though put prices still exceed calls on Deribit, indicating lingering downside hedging. Bitcoin dominance has ranged 57.4%–60.1% since September. Key metrics point to reduced demand and profit-taking amid macro caution, with short-term downside pressure but potential longer-term support from macro factors and inflation-adjusted yields.
Bearish
The immediate market impact is bearish. Bitcoin’s drop to $68K, rising positive correlation with the Nasdaq, declines in memecoins, and multi-billion-dollar liquidations point to risk-off sentiment and reduced speculative demand. Key derivatives metrics—falling open interest (to $93B), large liquidations ($229B) and lower futures OI in major altcoins—indicate deleveraging and profit-taking. Although implied volatility has eased from peaks (reducing panic), put-heavy option positioning on Deribit shows lingering downside hedging. Historically, similar tech-led selloffs and correlation spikes have transmitted volatility to crypto (e.g., past equity drawdowns in 2022–2023), prompting short-term price pressure and thinner liquidity. Short-term traders should expect continued downside risk, higher correlation with equity moves, and sensitivity to macro headlines (AI fears, rates, yields). For medium-to-long term, pockets of strength in AI tokens (MORPHO) and privacy coins (ZEC) plus macro tailwinds (real yields, ETF flows) could provide support, but sustained recovery likely requires renewed demand, stabilization in equities/gold, or positive macro catalysts.