Bitcoin, ether decline as Coldcard exploit enters a fifth day

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Analytics

Bitcoin $BTC$62,637.95 and ether ($ETH) are under pressure as the multimillion-dollar hack of the hardware wallet Coldcard enters a fifth day, raising questions over the safety of direct custody as a holding strategy.

The incident has rocked sentiment on crypto social media, with numerous small holders complaining of losing long-term holdings and reassessing their faith in crypto.

"Worse for sentiment, it [the hack] has spooked holders into sending coins back to exchanges, the opposite of the self-custody trend crypto is built on,” analysts at Marex said. “When the thing wobbling is cold storage itself, a cheaper barrel does not fix it."

Given the gravity of the situation and the $114 million of bitcoin stolen, the price reaction of the largest cryptocurrency appears relatively restrained. $BTC was recently 1.5% lower over 24 hours to $62,595, a level it has visited several times in recent weeks, with ether down nearly 2% to $1,842. The CoinDesk DeFi Select Index has dropped 2.5%.

Bitcoin’s 200-week simple moving average, currently placed above $63,000, is back in focus after the Michael Saylor-led Strategy (MSTR) said it is tracking the long-term average and hinting at resuming purchases after a five-week pause, its longest, funded by preferred stock held at a steep 12%.

Geopolitical news flow remains confusing. President Donald Trump said new talks with Iran will begin today, an assertion that Iran quickly rejected. Foreign Ministry spokesperson Esmaeil Baghaei said there are no plans to receive a delegation from the U.S. nor send an Iranian one.

Derivatives Positioning

Long-short ratio skews bearish: The crypto long-short futures volume for takers is leaning more bearish than late last week, with over 52% in shorts. A taker is an entity that removes liquidity from an exchange’s order book by executing an order immediately against a resting order.
$BTC OI rises: Activity has picked up slightly in $BTC futures, with open interest (OI) rising to a one-month high of 772K $BTC. Positioning is leaning bullish, with annualized funding rates moderately positive at 4%. However, the 24-hour cumulative volume delta is slightly negative, which means bears are being more aggressive and trading at market prices rather than passive limit orders.
Mixed action in altcoins: ADA, $ETH, and BCH are other notable OI gainers, while open interest in SOL continues to slide. TRX, DOGE, CC, and GRAM stand out with negative funding rates, a sign of growing bias for bearish short positions. Still, rates aren’t deeply negative, meaning these markets do not look crowded with bearish bets.
Steady volatility index: Despite the Coldcard hack and rising Treasury yields, there are no signs of any stress or panic in the crypto options market. That’s evident from the BVIV, the 30-day implied volatility index, which is hovering near 37% for the fourth straight day. The IV is influenced by demand for options or hedging instruments offering protection from uncertainty and price swings.
Calls dominate trading: In Deribit-listed options, calls at $68,000 and $70,000 are the most traded bets. A call represents a bullish bet on the market.