Global crypto derivatives markets experienced a sudden round of pain on Tuesday as exchanges liquidated about $370 million of futures bets after bitcoin’s rebound confounded traders positioned for a drop. Gold climbed above $3,500 per ounce, underscoring shifting flows across risk assets.
The liquidation event trimmed open interest across most top tokens, with BTC the main exception: bitcoin futures open interest ticked up over 1%, signaling fresh capital even as other perpetuals and futures saw outflows. Perpetual funding rates are hovering just above zero across major tokens, indicating only a slight long bias rather than exuberant bullishness.
On-chain trackers highlighted active profit-taking. Lookonchain flagged a whale that swapped 425 BTC (roughly $46.5 million) for more than 10,500 ETH over the past four days. Glassnode data showed long-term holders spent around 97,000 BTC in a single session — a sign some investors are locking in gains or rotating into ether.
Derivatives positioning points to asymmetric concern: puts in BTC options trade at a premium through December on Deribit, while ether shows a milder put bias. Traders picked up protective September $105K puts and sold October $135K calls, reflecting a market that prices meaningful downside risk even as opportunistic upside bets persist.
In token news, newly launched World Liberty Financial (WLFI) — a controversial, Trump-affiliated DeFi token — proposed a buyback-and-burn program funded by fees across Ethereum, Binance Smart Chain and Solana. The design reframes supply dynamics toward “engineered scarcity”, with supporters saying higher volume will generate fees that fuel token burns and align holders with protocol growth. WLFI traded near $0.23 with a reported $6.39 billion market cap, sharply below earlier futures-driven valuations.
Security concerns cloud WLFI’s path. Researchers and SlowMist’s founder warned of an exploit tied to Ethereum’s EIP-7702 delegate contract that enabled attackers to siphon tokens via phishing-style flows. Community proposals to stake large portions of locked supply have drawn both praise and criticism, raising governance and reuse-of-supply questions.
Why this matters: the market is balancing fresh capital flows, profit-taking and macro pressure while new token launches face elevated security and liquidity risks. Investors should treat recent moves as rotation signals, not certainties — and factor platform security and market depth into risk assessments.
Source: CoinDesk. Read the original coverage for full details.