Altcoins Surge While BTC Tests Key Resistance
Bitcoin has once again breached the $110,000 level, rising by more than 1% in the last 24 hours, but questions remain about the sustainability of this rally. This price movement was closely mirrored by a broader altcoin surge, especially within the DeFi sector.
Uniswap (UNI) and Aave (AAVE) were among the top performers, jumping 24% and 13% respectively. Their gains were fueled by positive comments from the SEC Chair regarding decentralized finance, injecting optimism into an otherwise cautious market.
Meanwhile, other large-cap assets like Ether (ETH), Solana (SOL), and Chainlink (LINK) also showed strength, posting gains between 5% and 7%. The broader crypto index rose 3.3%, largely due to these standout performances.
Market Sentiment: Defensive Despite Gains
Despite the uptrend, analysts warn that crypto market sentiment remains defensive.
“Funding rates and other leverage proxies point toward a steadily cautious sentiment,” said Vetle Lunde, Head of Research at K33.
He highlighted that negative funding rates on BTC perpetual swaps — with an annualized rate of just 1.3% — suggest that positioning is still far from euphoric. Historically, Bitcoin rarely peaks when funding rates are negative, hinting that there may be room for further upside.
Leveraged ETFs Signal Muted Enthusiasm
The ProShares 2x Bitcoin ETF (BITX) currently holds exposure to 52,435 BTC, far below its peak of 76,755 BTC in December 2023. This suggests investor caution, even as prices climb.
“Bitcoin does not usually peak in environments with negative funding rates,” Lunde emphasized, suggesting that this could be the start of a healthy upward phase — not the top.
Skepticism Around Breakout Validity
However, not all market watchers are optimistic.
“Is this a true breakout that will continue? Probably not,” noted Kirill Kretov, senior automation expert.
He warned that the current price movement may be part of a volatility cycle, predicting a potential sharp drop if sentiment shifts due to negative news or macro developments.
Conclusion
Bitcoin’s rise to $110K, supported by DeFi optimism and altcoin rallies, could signal early momentum for a broader rally. But with negative funding rates and muted ETF flows, traders remain cautious, watching closely for confirmation or reversal.