Bitcoin and Ether prices decline as the Coldcard wallet hack continues, raising concerns about self-custody safety.
Bitcoin and Ether are facing downward trends as the Coldcard hardware wallet hack, which has caused losses nearing $114 million, enters its fifth day. The incident has sparked widespread concerns over the safety of self-custody options in cryptocurrency investments.
The hack has dampened sentiments in the cryptocurrency community, prompting many small investors to express their frustrations online, reflecting on their long-term losses and questioning their faith in digital currencies.
Marex analysts observed that the hack has unsettled holders, leading them to transfer coins back to exchanges, countering the self-custody movement that cryptocurrencies were built upon. Despite the severity of the hack, Bitcoin's price has reacted relatively mildly, decreasing 1.5% in the last 24 hours to $62,595, while Ether dropped nearly 2% to $1,842. The CoinDesk DeFi Select Index also saw a decline of 2.5%.
Market attention is shifting back to Bitcoin’s 200-week simple moving average, which is currently above $63,000. This interest has been piqued by Strategy (MSTR), under Michael Saylor's leadership, which is considering resuming purchases after a five-week pause funded by preferred stock at a hefty 12% interest rate.
Furthermore, geopolitical events are contributing to market uncertainty, as President Donald Trump announced upcoming discussions with Iran, which Iran’s Foreign Ministry quickly denied, claiming no U.S. delegation is planned for visits.
Derivatives Market Positioning
- Bearish Long-Short Ratio: The crypto long-short futures volume has turned more bearish, with over 52% of positions being shorts, indicating a cautious market sentiment.
- Increase in BTC Open Interest: Bitcoin futures activity has seen a slight increase, with open interest rising to a one-month high of 772,000 BTC. Positioning remains bullish, as shown by annualized funding rates of 4%, though the 24-hour cumulative volume delta is slightly negative, suggesting more aggressive bearish trading.
- Variable Altcoin Trends: Open interest has increased for ADA, ETH, and BCH, while SOL's open interest is declining. Negative funding rates for TRX, DOGE, CC, and GRAM suggest a growing bearish sentiment, though these markets lack significant short positions.
- Stable Volatility Index: Despite the Coldcard incident and rising Treasury yields, the crypto options market shows no panic, with the 30-day implied volatility index remaining stable around 37% for four consecutive days, driven by demand for hedging options.
- Calls Lead Trading Activity: The options market on Deribit shows that call options at $68,000 and $70,000 are the most traded, reflecting a bullish market sentiment.
NEAR Protocol Updates
- NEAR Protocol has announced that its Intents system has exceeded $24 billion in lifetime transaction volume, allowing users to specify outcomes like token swaps across blockchains, with autonomous execution by the network.
- This follows the launch of protocol version 2.13 last month, introducing features such as quantum-safe signing to bolster security against future quantum computing threats and dynamic resharding for better workload distribution.
- NEAR is also expanding into AI, having introduced staking for AI compute, enabling token holders to lock NEAR tokens to support AI applications, directly linking token utility to AI demand.
- Currently, NEAR is trading at around $1.72, according to CoinDesk data.
