Crypto Markets Today: Bitcoin Tests Key Support as Bullish Optimism Fades

Market Overview - Bitcoin is currently trading at $111,000, maintaining a critical support level at $110,000 after a significant drop from $121,000, resulting in a loss of $500 billion in overall crypto market capitalization [1] - Altcoins have experienced severe declines, with plasma (XPL) down 58% in a week, while FET, OP, and ETHFI have all lost over 35% of their value [1] Derivatives Positioning - The BTC futures market shows signs of stabilization with open interest around $25.5 billion, indicating no major changes following the weekend's volatility [3] - The 3-month annualized basis has decreased to a range of 5-6%, reflecting a cooling of bullish sentiment [3] - Funding rates exhibit divergence, with Bybit's rate at -5% and Hyperliquid's at 10%, indicating mixed market sentiment [3] Options Market Dynamics - The BTC options market is experiencing bullish acceleration, with a balanced 24-hour Put/Call Volume at a 50-50 split, a shift from previous call dominance [3] - The 1-week 25 Delta Skew has spiked to 12.62%, indicating a substantial premium for call options, suggesting traders are positioning for potential price increases [3] Liquidation Data - Coinglass reports $627 million in liquidations over 24 hours, with a 70-30 split between longs and shorts, highlighting significant market activity [3] - Major liquidations include ETH at $185 million, BTC at $125 million, and others at $69 million [3] - The Binance liquidation heatmap identifies $110,600 as a critical liquidation level to monitor [3] Plasma XPL Analysis - Plasma XPL has fallen 13.5% on Tuesday, totaling a 52% decline since its late September debut, raising concerns over its tokenomics and large ecosystem allocations [3] - The circulating supply is 1.8 billion out of a total of 10 billion, indicating potential sell pressure as vested tokens unlock [3] - Tokens were sold at $0.05 during the public round, with current prices around $0.41, leaving ICO buyers in profit while later investors face losses [3] - Analysts predict continued downward pressure as early investor tokens become liquid, with a major unlock expected in Q2 of 2026 [3]