Dollar Freefall Sparks Crypto Frenzy: Bitcoin Holds the Line

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Markets

What to know:

  • Bitcoin, stubborn as a winter thief, lingered near 89,200 dollars, while ether climbed above 3,000, buoyed by a merciless drop in the U.S. dollar index (DXY).
  • Altcoins surged, with Hyperliquid’s HYPE up 25% and Solana’s staking token JTO stretching a 31% three-day rally.
  • Speculative tokens led the charge, including Solana-based memecoin PIPPIN up 64%, as CoinDesk’s altcoin-heavy CD80 index outpaced CD20.

Bitcoin moved with a lazy resolve on Wednesday, little changed after yesterday’s gains as the dollar weakened, and ether relinquished some of its strides.

But the real momentum came from other corners of the altcoin market. Hyperliquid’s native HYPE extended its ascent, up 11% since midnight UTC, while Solana’s liquid staking token surged 32%, marking its biggest one-day ascent since December 2023, according to CoinDesk data.

The Dollar Index (DXY) sank to a four-year low on Tuesday, decisively below a trendline etched since 2011, even as a certain public figure proclaimed the dollar “doing great” and professed not to be “concerned,” as if weather could be commanded by boasts alone.

The strength or weakness of the dollar casts a long shadow over crypto, for most assets are priced against the greenback. This inverse relationship was a staple in the last bear market, when the dollar rose 22% between November 2021 and October 2022 and bitcoin shed more than 70% of its value.

Derivatives positioning

  • Another $230 million in leveraged bullish crypto futures positions were liquidated in the past 24 hours, continuing the grim pattern of long-side wipeouts since Monday.
  • Bitcoin and ether 30-day and one-day implied volatility indexes remain under pressure, as if traders expect little turbulence even with the Fed’s looming decision.
  • The notional open interest (OI) in futures tied to the HYPE token has surged over 20% in dollar terms in 24 hours. That largely reflects price gains, because in token terms it remains near 57 million HYPE.
  • OI in BTC, ETH, XRP and BNB has risen 2%-4%.
  • Except ZEC and TRX, annualized funding rates for majors stay positive, hinting at a bullish tilt.
  • On Deribit, BTC and ETH puts trade at a premium to calls. Activity around BTC puts at the $85,000 strike signals demand for downside hedges.
  • Block flows in BTC are mixed, with traders chasing both put and call spreads. In ETH, straddles and risk reversals are in demand.

Token talk

  • While HYPE and JTO shine on Wednesday, the true champion of gains is PIPPIN, a Solana-based memecoin and autonomous AI agent born of AI innovator Yohei Nakajima.
  • PIPPIN is up 64% in the past 24 hours and is the most bought token by “smart money” investors, according to Stalkchain.
  • Decentralized exchange tokens and ASTER also climbed, with the former up 3.11% since midnight UTC for a 24-hour gain of 10.9%, while ASTER trades at $0.69, up 5.7% since Tuesday morning.
  • CoinDesk indexes whisper altcoin strength: the bitcoin-dominant CD20 is up 2.47% in the last 24 hours and 2.38% since year’s start, while the altcoin-heavy CD80 posts a 3.7% 24-hour gain and 7.3% year-to-date rise.
  • The buoyant mood across altcoins comes as bitcoin remains in a tight trading range-historically a giddy time for altcoins as capital flits toward speculative bets until bitcoin makes a decisive move one way or the other.

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2026-01-28 15:12