The crypto market is closing out July on the back foot, with bitcoin (BTC) falling 1.31% since midnight UTC to $63,870 and ether (ETH) dropping 1.40% to $1,890 after struggling to regain the $2,000 level it touched earlier this month.

The performance is diverging from equities, with South Korea's Kospi surging by more than 15%. Nasdaq 100 and S&P 500 index futures are also in the green.

The conflict in the Middle East and hawkish comments from the Federal Reserve committee have dented crypto’s recovery hopes this week. The CoinDesk 20 Index has dropped 2.34% since midnight Monday, though with a gain of 8.7% since June, it’s still positive for the first month in three and by the most in a year.

Derivatives positioning

Taker long-short futures volume ratio: As the market wilts, the taker long-short futures market volume ratio continues to lean bearish, suggesting a downside bias. A taker is a market participant who executes an order immediately against an existing order in the book.XRP futures open interest rises: XRP’s futures open interest (OI) rose further, extending the three-week upswing to 2.27 billion tokens, the most since late June. The token’s price has declined to $1.07 from $1.13 during the period. A combination of a drop in price alongside a rise in OI is said to confirm the downtrend, a sign traders are shorting the market in anticipation of a deeper price drop.BTC in stasis: BTC’s OI remains static at around 750K, as it has all month. That’s a sign traders are unwilling to deploy capital in leveraged products despite signs of stability in the market. It’s no surprise that BTC’s early month bounce from under $58K has stalled in the $62K to $65K range. It’s the same story for ether and Solana ( HSDT ).UNI’s OI growth: Uniswap’s UNI token is the OI growth leader for the third straight day, rising to 75.80 million UNI, a level last seen Feb. 14. This is a clear sign of investors willing to take on risk in tokens backed by positive newsflow. Recently, BlackRock ( BLK ) decided to debut its tokenized Treasury fund on Uniswap.Negative cumulative volume delta: Most major tokens, including UNI, have negative 24-hour OI-adjusted cumulative volume delta, a feature consistently observed during sharp downtrends over the past year. A negative CVD means traders are shorting more at market orders than passive limit orders. In other words, bears are being more aggressive.Bitcoin implied volatility: Bitcoin’s BVIV, the 30-day implied volatility index, fell to 37%, the lowest since May. These levels have served as floors in recent years, bringing about a bounce in the so-called fear index. Since ETFs debuted in 2024, the BTC price correlation with the BVIV has been negative, meaning any bounce in the BVIV could be accompanied by a fresh decline in the spot price.Options open interest: On Deribit, bitcoin and ether options worth $10 billion expired early today. Now the distribution of open interest in remaining expiries that extend all the way to June 2027 shows a $60,000 put as the most popular bet. A put represents a bearish bet on the market.

Token talk

Uniswap (UNI) was Friday’s standout performing altcoin, rising by 9.30% over 24 hours to $4.41 as it sustains momentum from its Robinhood layer-2 integration announced earlier this month.Ethena (ENA) extended its recovery, rising 1.23% since midnight UTC and 4.31% over 24 hours to $0.082, with the token now up significantly from its July lows. Keep in mind it’s still more than 90% below its all-time high.Lighter (LIT) fell a further 2.28% as the correction from its July peak deepened, with the token now 20% below the highs it set earlier this month after its 200% rally between May and early July.Zcash (ZEC) gave back 2.15% to $459 after a strong run earlier in the week, with the privacy coin sector losing ground on Friday.Cardano (ADA) added 0.94% since midnight and 4.09% over 24 hours, quietly extending a recovery that has seen it claw back after June’s 45% plunge.