Bitcoin stagnates, risk-off drives the gold market through covered calls and ETFs—Today's cryptocurrency market trends

The cryptocurrency market today is facing headwinds from the macroeconomic environment. Bitcoin continues to trade within a narrow range at $87,990, while Ethereum has fallen 3.21% over the past 24 hours to $2,930. The US stock market also declined in tandem, with Nasdaq 100 futures and S&P 500 futures dropping 0.4% and 0.25% respectively, as investors shift toward safer assets. As a result, gold and silver hit record highs, spreading a risk-off sentiment across the entire market.

The dollar pushes US stock futures lower, supporting gold in a risk-off environment

Geopolitical uncertainties are weighing on market sentiment. Despite the first trilateral talks between Ukraine, Russia, and the US held last weekend, expectations for conflict resolution remain limited. This sentiment has accelerated risk-off (defensive positioning), leading to increased demand for traditional safe-haven assets like gold. Gold surged over $5,500 per ounce, with its nominal value increasing by approximately $1.6 trillion in just one day.

In contrast, the crypto market remains stagnant. Despite the narrative of Bitcoin as a “real asset,” it continues to be traded as a high-beta risk asset. Meanwhile, investors seeking value preservation are increasingly favoring physical gold and silver over digital tokens, highlighting a clear divergence in market sentiment.

Slow movement in BTC and ETH, while altcoins test imbalance in put-call strategies

In the altcoin market, signs of a rally are emerging, albeit limited. LayerZero (ZRO) experienced temporary upward pressure due to expectations of a major upgrade scheduled for early February, but as of today, it has fallen 6.57% over 24 hours. Tron (TRX) and Dash (DASH) continue to fluctuate, with TRX up 0.64% and DASH down 2.27%, showing divergent movements.

Limited liquidity is amplifying price volatility in these altcoins. For example, in the case of Toncoin (TON), with a market cap of $3.59B, the market depth ranges from $580K to $700K, which is limited. In such an environment, the lack of sell orders could lead to exaggerated price increases when altcoins enter a bullish phase.

Volatility index drops to 40%, covered call strategies continue to generate selling pressure

In the derivatives market, interesting movements are unfolding. The 30-day implied volatility index (BVIV) for Bitcoin has fallen to 40%, reversing from Tuesday’s 44%. This decline suggests a continued interest in volatility selling through covered call strategies. Covered calls are strategies where investors lock in yields while limiting upside potential, which tend to suppress volatility in such environments.

Over the past 24 hours, more than $200 million in crypto futures positions have been liquidated, mostly long (bullish) positions. The recent price decline since the start of the week has outpaced bullish traders.

Analysis on Deribit indicates that Ethereum’s short-term and near-month put options are more expensive than Bitcoin’s, suggesting traders are more bearish on ETH. Additionally, ETH was the only top 10 token with a slight increase in open interest (OI) over 24 hours, while other major tokens like BTC, XRP, and SOL recorded outflows.

Adjusted OI cumulative volume delta indicators show net buying in markets like Tron (TRX), Zcash (ZEC), and Bitcoin Cash (BCH), while other markets including BTC are dominated by net selling.

Metaverse tokens and NFT markets surge, institutional participation possible amid ETF environment

Optimistic outlooks are emerging from the emerging sectors. The expansion of cryptocurrency ETFs could encourage greater institutional participation. The most successful sector in 2025 remains metaverse tokens, with the CoinDesk Metaverse Select Index (MTVS) rising 50% since January 1. This rise is supported by strong performances from Axie Infinity (AXS) and The Sandbox (SAND).

Notably, Pudgy Penguins is gaining attention. This NFT project is transitioning from a speculative “digital luxury” to a multi-faceted consumer IP platform, with retail sales exceeding $13M and over 1 million units sold. It is engaging users through gaming, experiences (Pudgy Party surpassed 500K downloads in two weeks), and widely distributed tokens (airdropped to over 6 million wallets), with a strategy to onboard users into Web3.

The altcoin season indicator has risen from 24/100 to 29/100 over the past week, suggesting traders are seeking to profit in a calmer market environment. Meanwhile, the CoinDesk 20 (CD20) index, reflecting Bitcoin dominance, declined 0.6%, while meme coins, DeFi, and metaverse-related indices all increased.

Today’s sentiment indicators show that, in contrast to the extreme bullishness in the gold market, fear still dominates the crypto market. Despite increasing participation from institutional investors via covered call strategies and ETFs, Bitcoin remains at a disadvantage in risk-off environments when competing with traditional safe assets. As liquidity in the altcoin market improves and the broader market enters an upward phase, the entry of mainstream investors through ETFs could still drive sector-wide growth.