Bitcoin gave up an early Thursday recovery as a selloff in U.S. government bonds pushed the 10-year Treasury yield to its highest level since 2007, keeping pressure on crypto markets for a second day.

BTC was trading at $83,344, down 1.23% since midnight UTC after failing to hold its earlier gains. The decline came as rising borrowing costs weighed on risk assets, although buyers in Asian and European markets helped limit the broader selloff.

Major cryptocurrencies moved lower alongside bitcoin. Ether fell 1.55% to $2,659.02, XRP declined 2.87%, and Solana slipped 1.61% to $113.14. Smaller tokens briefly recovered during European trading before reversing lower, with NEAR and HYPE falling 3.32% and 3.94%, respectively.

The dollar index rose 0.13% to 101.24, its strongest level since July. Gold dropped 0.71% to $4,257, while U.S. equity futures remained under pressure. S&P 500 futures declined 0.61%, and Nasdaq 100 futures fell more than 1%.

Derivatives Positioning

Shorts represented more than 52% of 24-hour taker volume, which rose 10% to $250 billion. Open interest, meanwhile, declined nearly 6% to $149 billion. The combination of higher trading activity, lower OI and short-heavy flows suggests traders are closing existing positions rather than significantly increasing new short exposure.

Bitcoin futures OI fell 6% as the cryptocurrency’s price declined 3% over 24 hours. Because open interest is measured in notional terms, its sharper drop suggests actual contracts are being closed. The move is therefore more consistent with long positions being unwound than with a fresh wave of short selling.

Binance whale positioning offers a contrasting signal. The whale long/short account ratio has climbed back above 1 to 1.30, while the whale position ratio has remained below 2 for a second consecutive day. Larger traders appear to be either waiting on the sidelines or taking positions that run counter to the broader selling trend.

XRP is showing a similar deleveraging pattern to bitcoin, with its notional OI declining faster than its price. ETH and SOL differ, as their OI declines have roughly tracked their respective price losses, suggesting existing positions are mainly losing value rather than being actively closed.

The 24-hour OI-adjusted cumulative volume delta remains negative for major cryptocurrencies such as BTC and ETH, indicating that aggressive selling continues to exceed aggressive buying. XRP, SUI and AVAX are recording some of the most negative readings, pointing to concentrated selling pressure.

Litecoin remains a notable outlier. LTC has gained nearly 8% over the past 24 hours, while futures OI measured in tokens has risen to 8.96 million, its highest level since Jan. 18. OI has increased consistently since Sept. 19. The combination of higher prices and rising coin-denominated OI points toward new long positions rather than simple short covering.

Options markets remain relatively calm despite the spot-market weakness. Thirty-day implied volatility for BTC and ETH is holding within recent ranges, while short-term implied volatility remains low compared with realized volatility. Traders are therefore not pricing in a major panic.

Bitcoin’s one-week options skew has shifted into positive territory, indicating greater demand for downside protection. Ether has seen a similar change, reinforcing the more defensive positioning across the options market.

More than $17 billion in BTC and ETH options are scheduled to expire on Deribit Friday, with most positions currently in the money. Whether traders roll those contracts into later expiries or allow them to settle could influence volatility heading into the weekend.

Token Movers

Litecoin continued to outperform despite the broader market decline, rising 8.1% since midnight UTC and 6.2% over the rolling 24-hour period. The move comes as traders prepare for next July’s block reward halving, with historical bottoms typically forming six to 12 months ahead of the event.

Ethereum Classic added 7.6% to reach $9.42, while Morpho climbed 4.1% to $2.67.

The heaviest losses were concentrated among tokens that had rallied strongly earlier in the week. Venice, an AI inference token, fell 5.2% since midnight and 9.6% over 24 hours to $28.71. Lighter declined 4.2% and 2.1% over the respective periods to $5.09, while Pump.fun dropped 4.1% on the day and 11% over 24 hours.

Hyperliquid lost 3.9% to $90.39, while NEAR fell 3.1% to $4.20. Venice was down 8.7% over 24 hours despite being among the week’s stronger performers.

XRP and Bitcoin Cash posted the largest declines among the major cryptocurrencies, each falling 2.7% since midnight UTC to $1.46 and $328.56. XRP was down 8.3% over 24 hours, while Bitcoin Cash lost 6.8%, giving back some of the gains it recorded after Wednesday’s CME futures announcement.