Market Overview - Bitcoin (BTC) and the broader crypto market experienced a decline, influenced by the European Union's plans for €93 billion ($110 billion) in tariffs in response to U.S. President Donald Trump's threats regarding Greenland [1] - The tariff concerns negatively impacted equities in Europe and U.S. futures, while safe-haven assets like gold and silver reached record highs [1] Bitcoin Performance - Bitcoin is currently trading at $93,000, reflecting a 2.5% decrease since Sunday [2] - The cryptocurrency fell below the $94,500 support level, indicating a potential return to a trading range between $85,000 and $94,500, which has been in place since mid-November [3] Derivatives Market - The crypto market pullback resulted in nearly $800 million in leveraged long bets being liquidated within 24 hours due to margin shortages [6] - Total notional open interest (OI) in crypto futures decreased by over 2% to $138.14 billion, with Bitcoin's OI increasing by 0.65% while OI for other major tokens dropped by 8%-13% [6] - The 30-day implied volatility for BTC and ETH has not significantly increased, indicating traders do not expect major price movements in the near term [6] Altcoin Market - The altcoin market showed mixed performance, with the CoinDesk 80 Index (CD80) down 4.64% over the past 24 hours, while the CoinDesk 20 (CD20) fell by 2.5% [2] - Monero (XMR) diverged positively from Bitcoin, rising over 13%, while DeFi tokens faced double-digit losses [6] - Medium market cap tokens underperformed compared to major cryptocurrencies, highlighting a liquidity issue following October's liquidation events [6] Liquidations and Market Impact - The tariff-induced selloff led to $815 million in liquidations, with $231 million attributed to Bitcoin and the remainder affecting the altcoin market [6]

Market Overview - The crypto market is experiencing a positive sentiment with Bitcoin (BTC) reaching $93,350, its highest level since December 11, before retracting some gains [1] - The significant price movement occurred at midnight UTC coinciding with the opening of Bitcoin futures trading on the CME exchange, creating a price gap between $90,500 and $91,550, which is expected to be filled in the coming days [1] Trading Focus - Traders are primarily concentrating on Bitcoin, which has increased by 1.33% since midnight, while altcoins such as CoinDesk Meme (CDMEME) and Metaverse (MTVS) indexes have declined by 6.4% and 2.3% respectively [2] - The rise in equities and precious metals indicates a risk-on sentiment following recent U.S. actions in Venezuela [2] Derivatives Positioning - In the last 24 hours, exchanges have liquidated leveraged crypto futures bets worth $260 million, predominantly from short positions, indicating a bearish leverage that was caught off guard by the price increase [5] - Open interest (OI) in Bitcoin (BTC), Bitcoin Cash (BCH), XRP, and BNB has risen between 2% to 5%, while OI for ETH, SOL, DOGE, and ZEC has remained flat to negative, suggesting improved risk appetite for select coins [5] - BTC's annualized perpetual funding rates have exceeded 10%, reflecting growing demand for bullish exposure, while rates for several altcoins remain below zero [5] Token Performance - Despite the focus on Bitcoin, some tokens have outperformed the broader market, including LIT, which has risen by 3.9%, and FET, which has increased by 7.4% since midnight [5] - However, some tokens like Zcash (ZEC) have declined by 2.5%, and memecoins such as DOGE and PEPE have lost 1.4% and 4.5% respectively, indicating a fractured performance across the altcoin market [5] - The average crypto relative strength index (RSI) is at 58/100, entering "overbought" territory, suggesting a potential short-term price drop as profit-taking may occur [5]

Core Insights - Lighter's founder announced on Discord that the project has a points distribution independent of trading activities, accounting for less than 10% of the total airdrop [1] - An agreement has been reached with a third-party liquidity provider to offer up to $5 million in liquidity during the private testing phase, aimed at compensating for early liquidity risks [1] - Lighter is collaborating with a trading company to leverage its expertise in low-latency systems to accelerate platform development [1] Financial Details - Jump Crypto has been providing market-making services for Lighter since mid-November, receiving an airdrop of 9.285 million LIT tokens, valued at approximately $24.2 million, which represents about 0.93% of the total supply [1]

Core Insights - Approximately $250 million was withdrawn from the decentralized perpetual exchange Lighter following the airdrop of $675 million worth of LIT tokens, indicating significant capital movement post-airdrop [1] - The outflows represent about 20% of Lighter's total value locked (TVL) assets, which amount to $1.4 billion, suggesting a notable impact on the platform's liquidity [2] - The trading volume of LIT had been stable between $8 billion to $15 billion in November but recently fell to as low as $2 billion, while the price of LIT decreased by nearly 23% from $3.37 to approximately $2.57 since December 30 [3] Group 1 - The withdrawal of $201.9 million occurred on the Ethereum blockchain, with an additional $52.2 million withdrawn on Arbitrum, highlighting the distribution of outflows across different platforms [1] - CEO of Bubblemaps noted that such outflows are common after airdrops as users often rebalance their positions and seek new farming opportunities, indicating a trend in decentralized finance (DeFi) [2] - Similar outflows were observed after other token launches, suggesting a pattern in user behavior following token generation events (TGEs) [2] Group 2 - CertiK's senior blockchain security researcher pointed out that large withdrawals post-TGEs are typically driven by airdrop farmers and early participants exiting, which is a widespread phenomenon across various token launches [3] - The lack of transparency in new token distributions creates opportunities for insiders to realize significant gains shortly after launch, raising concerns about market dynamics [3]

New Markets - Three new perpetual markets (LIT, GOLD, MU) are now available for trading [1] - Up to 20x leverage is offered for these new markets [1]

Airdrop Probability - Polymarket bettors are pricing an 88% chance of Lighter's airdrop happening by the end of 2025 [1] Market Activity - $9.5 million in volume backing the bet after Hyperliquid listed LIT for pre-market trading [1]

Market Manipulation & Oracle Design - Lighter's LLP holders gained $22 million from a failed manipulation attack [1] - An attacker lost millions attempting to inflate $HYPE from $46 to $98 [1] - External oracles prevented liquidations during the $HYPE manipulation attempt [1] - Hyperliquid previously experienced a similar situation on XPL with $10 billion volume [1] - Oracle design effectively generated revenue from the attacker's failed manipulation [1] Token Valuation - $LIT launching at a $4-6 billion fully diluted valuation (FDV) is now perceived as potentially undervalued [1]