Bitcoin bounce fades as Zcash and HYPE sink; bearish derivatives signal more downside
Crypto markets slid ahead of key U.S. inflation (CPI) data, pushing traders to price a more bearish near-term outlook. Bitcoin retraced back below $61,500 and is trading under its 200-week moving average—an indicator some analysts associate with prolonged bear markets.
Zcash (ZEC) and Hyperliquid (HYPE) led losses, each down more than 10% in 24 hours. Other decliners included ADA, ONDO and BCH, each down over 4%. The CoinDesk 20 Index fell about 3%.
Derivatives showed a clear risk-off tilt: liquidations jumped 38% to $418m, with longs accounting for the majority. For Bitcoin, open interest edged up while price fell, aligning with fresh short positioning. Perpetual funding rates and OI-adjusted CVD were negative across most major coins (including ETH and XRP), suggesting sellers are hitting bids rather than only placing passive orders. Implied volatility rose ahead of CPI, reinforcing uncertainty.
Token-level developments added noise. Uniswap V4’s TVL appeared to surge more than 350% day-on-day, but CoinDesk linked the spike to a hacked Humanity Protocol “H” token minted in unlimited supply and inflating dashboard figures without real deposits. Separately, Morpho (MORPHO) jumped 12% after raising $175m, though the token later gave back some gains.
Overall, the bitcoin bounce narrative is being challenged by worsening positioning, volatility, and liquidation data, which could pressure risk assets short term.
Bearish
This article is bearish for trading because multiple independent indicators point the same way: (1) Bitcoin is back below $61.5k and under the 200-week SMA, a regime many analysts associate with extended downside phases; (2) liquidations surged while OI rose/funding stayed negative, a combination that often appears during phases where new shorts build as price weakens; (3) negative perpetual funding and negative OI-adjusted CVD across most majors (BTC/ETH/XRP) implies aggressive selling into bids rather than orderly profit-taking.
The ZEC and HYPE drawdown over 10% adds to the “risk-off” message from the alt complex, which typically underperforms when traders expect trend continuation lower.
However, one data item (Uniswap V4 TVL) is likely distorted by a hacked, worthless token mint (Humanity Protocol H). This reduces confidence in “TVL migration” narratives and suggests traders should focus more on derivatives/price action than headline on-chain dashboards.
In the short term, expect heightened volatility around CPI and potential continuation of forced selling if funding/liquidation dynamics persist. In the longer term, the market could stabilize if downside hedging becomes crowded and sellers exhaust—similar to past periods when funding turns less negative and options skew normalizes after major macro prints—but the current positioning described here still favors bears over bulls.