Crypto markets plunged toward April lows on Friday as a lingering liquidity crunch intensified price swings. Both Bitcoin (BTC $87,058.50) and Ether (ETH $2,934.13) dropped roughly 10% within 24 hours. BTC was last trading near $82,200, while ETH hovered around $2,700.

The altcoin market fared even worse, with several tokens falling as much as 20%. The CoinDesk 20 Index (CD20) fell 10%, while the CoinDesk 80 Index of next-largest tokens lost 12%, leaving all constituents in negative territory.

Liquidity Crunch Amplifies Volatility

The sell-off is partly attributed to the liquidity crisis that began during October’s market sell-off and liquidation event. CoinDesk Research notes that liquidity has remained thin since that crash, leaving markets vulnerable to sharper price swings.

The stress wasn’t confined to crypto. U.S. equities have also tumbled, with the Nasdaq 100 now trading 9.4% below its October 31 record high.

Derivatives Positioning

• Bitcoin’s 30-day implied volatility index (BVIV) surged past 64%, extending gains for the month.
• Ether’s volatility index jumped to 87%, the highest since April 10.
• The moves reflect growing market uncertainty and rising demand for options as spot prices slide.

Open interest (OI) in BTC fell to 700K BTC from 752K BTC in a single day, shaking out bullish leverage bets. Analysts note some traders are “knife-catching” — buying futures in a falling market. Similar collapses in OI were observed across altcoins, with DOGE, ENA, and ASTER dropping more than 15%.

On Deribit, BTC and ETH options show a clear bias toward puts. In BTC, put spreads accounted for 46% of total block flow over the past 24 hours, followed by put diagonal spreads. ETH options displayed a similar pattern. Some traders even bought deep out-of-the-money IBIT puts at the $15 strike.

Token Market Highlights

The altcoin market faced severe losses, with many tokens hitting multimonth lows. The Crypto Fear & Greed Index flashed 11/100, the lowest since June 2023.

Bitcoin and Ether also fell roughly 10%, although the average crypto RSI has entered oversold territory, suggesting a potential relief rally may be on the horizon.

Despite the broad sell-off, opportunistic traders found ways to profit. Two traders collectively pocketed $1.3 million by sniping Jesse Pollak’s creator coin, JESSE, purchasing the tokens in the same block they were deployed, according to Arkham Intelligence.