Bitcoin and ether are experiencing downward pressure as the Coldcard hardware wallet hack, which resulted in losses of approximately $114 million, continues into its fifth day. This incident has raised significant concerns regarding the safety of self-custody strategies in cryptocurrency holdings.

The hack has negatively impacted sentiment within the crypto community, with many small investors voicing their frustrations on social media, lamenting losses of their long-term investments and reconsidering their trust in cryptocurrency.

Analysts at Marex noted, "Worse for sentiment, it [the hack] has spooked holders into sending coins back to exchanges, the opposite of the self-custody trend crypto is built on. When the thing wobbling is cold storage itself, a cheaper barrel does not fix it." Despite the severity of the situation, the price reaction for Bitcoin appears relatively muted, with BTC down 1.5% over the past 24 hours to $62,595, a familiar level seen in recent weeks, while ether fell nearly 2% to $1,842. The CoinDesk DeFi Select Index has also decreased by 2.5%.

Attention is returning to Bitcoin’s 200-week simple moving average, currently above $63,000, especially after Strategy (MSTR), led by Michael Saylor, indicated it is monitoring this long-term average and may resume purchases after a five-week hiatus funded by preferred stock at a steep 12%.

Amid this turmoil, geopolitical developments add to the confusion. President Donald Trump announced that new talks with Iran will commence today, a statement that Iran’s Foreign Ministry quickly refuted, asserting there are no plans for a U.S. delegation to visit or for Iran to send one.

Derivatives Market Positioning

  • Long-short ratio skews bearish: The crypto long-short futures volume appears more bearish than late last week, with over 52% of positions being shorts. A taker is defined as an entity that removes liquidity from an exchange’s order book by executing an order against a resting order.
  • BTC Open Interest Rises: There has been a slight uptick in activity in Bitcoin futures, with open interest climbing to a one-month high of 772,000 BTC. Positioning remains bullish, indicated by moderately positive annualized funding rates of 4%. However, the 24-hour cumulative volume delta is slightly negative, suggesting that bears are more aggressive in trading at market prices rather than using passive limit orders.
  • Mixed trends in altcoins: Notable gainers in open interest include ADA, ETH, and BCH, while SOL's open interest continues to decline. TRX, DOGE, CC, and GRAM show negative funding rates, indicating a growing bias toward bearish short positions, though these markets are not overly crowded with bearish bets.
  • Steady Volatility Index: Despite the Coldcard incident and rising Treasury yields, there are no signs of panic within the crypto options market. The 30-day implied volatility index (BVIV) remains stable near 37% for the fourth consecutive day, influenced by demand for options and hedging instruments that offer protection against uncertainty and price fluctuations.
  • Calls Dominate Trading: In the options market on Deribit, the most traded bets are calls at $68,000 and $70,000, indicating bullish sentiment.

NEAR Protocol Developments

  • NEAR Protocol has reported that its Intents system has surpassed $24 billion in lifetime transaction volume. Intents allow users to specify desired outcomes, such as token swaps across different blockchains, with the network autonomously determining the execution.
  • This activity follows the network's release of protocol version 2.13 last month, which includes notable features like quantum-safe signing to enhance transaction security against future quantum computing threats and dynamic resharding for automatic workload distribution as traffic increases.
  • NEAR is also venturing further into AI, having launched staking for AI compute, enabling token holders to lock up NEAR tokens to support and earn from the computing power required for AI applications, directly linking token utility to AI demand.
  • Currently, NEAR trades at approximately $1.72, according to CoinDesk data.