Bitcoin holds near $77,400 as derivatives signal cautionCrypto markets flashed green on Wednesday, but falling futures open interest and mixed altcoin performances suggest traders are reducing risk rather than chasing the rebound. May 20, 2026, 10:43 a.m. 3 min readMake preferred on Bitcoin price (CoinDesk Data)What to know: Bitcoin gained 0.7% to $77,400 even as open interest in the cryptocurrency's futures fell, hinting that traders are trimming exposure into the recovery rather than adding to it.XRP open interest rose to its highest since October, adding over 5% to 2.15 billion XRP alongside price gains. Heavily negative cumulative volume delta suggests some participants may be shorting the bounce.Implied volatility for both bitcoin and ether sits near 2026 lows, prompting Deribit to flag long straddles as a preferred near-term trade for those anticipating a big move in either direction.The crypto market remained subdued on Wednesday as it grappled with a key level of support after bitcoin BTC$77,336.25 failed to break above $83,000 last week.The largest cryptocurrency was recently changing hands at $77,400 after adding 0.7% since midnight UTC. The move comes after a 5% loss over the past week.Ether (ETH) outperformed bitcoin, gaining 1% to $2,130, but the broader altcoin market remains mixed; CHZ, TON and ATOM lost between 1% and 3%, while DASH, STRK and PYTH all increased by 5%.U.S. equities fell on Tuesday after a selloff in the bond market, with investors now keeping a cautious eye on Nvidia (NVDA) earnings, which are due after the closing bell on Wednesday.Derivatives positioningCrypto futures activity cooled across the market, with 24-hour volume falling 29% to $142.76 billion. Open interest (OI) held steady around $127 billion, and liquidations declined for a second day to $153 million, down 47%.Cumulative open interest in dollar and USDT-denominated bitcoin futures on major exchanges slipped to 257,000 BTC, while the global OI tally for bitcoin futures dropped by just 1,000 BTC to 744,000 BTC. The declines suggest some traders are reducing exposure as the price rises rather than adding to positions.For XRP, there's a different story. Open interest has risen by more than 5% to 2.15 billion XRP, the most since Oct. 11, and the spot price has risen alongside, a combination that typically points to trend confirmation. One caveat, however, is worth noting. XRP’s 24-hour cumulative volume delta is the second most negative among major coins, suggesting sellers may be leading price action through aggressive market orders rather than passive limit orders. This could indicate some traders are shorting the bounce, perhaps anticipating it may not hold.Zcash (ZEC) remains among the top open interest gainers for a third consecutive day, with the tally rising to 2.27 million tokens as its price recovered to $586 from Saturday’s low of $486.60. The price chart shows a golden crossover of the 50- and 200-day simple moving averages, a signal typically associated with longer-term bullish momentum.Ether’s (ETH) market is heating up again, with open interest climbing back above 15 million tokens and approaching May 16's record high of 15.52 million. Positive funding rates and a negative 24-hour cumulative volume delta present a mixed picture, making it difficult to draw a clear conclusion about who is driving price action.Hyperliquid’s HYPE stands out with an annualized funding rate of minus 36.85%, pointing to a growing bias toward short positions even as the token trades at $48.85, its highest since Oct. 30. The negative funding alongside a rising spot price may suggest some traders are shorting futures as a hedge against long spot positions rather than expressing an outright bearish view.Bitcoin and ether implied volatility indices remain near year-to-date lows, suggesting the market is relatively calm despite growing volatility in U.S. Treasury markets. Deribit noted that bitcoin volatility looks cheap and suggested long straddles could be a preferred play in the near term, a bet on a significant price move in either direction rather than a directional call.Block trades featured bitcoin put ratio spreads and ether call spreads.Token talkThe top-performing altcoin on Wednesday is XDC, the native token of its namesake layer-1 blockchain, built to support the tokenization of real-world assets (RWAs). It is up by around 12% since midnight on the back of a 44% increase in daily trading volume.Privacy token DASH also outperformed, rising by 10% in the past 24 hours to form a clear uptrend from early April, characterized by two successive highs coupled with two higher lows.CoinMarketCap's "Altcoin Season" indicator is reading 34/100 after tumbling from last week's high of 50/100.More For YouA Seoul-based funeral services firm disclosed tens of millions of dollars in unrealized losses tied to leveraged ether ETF investments.What to know: A South Korean funeral company disclosed a roughly $33 million unrealized loss tied to a leveraged crypto-related ETF. The firm invested in the T-REX 2X Long BMNR Daily Target ETF (BMNU), which targets 200% of BitMine Immersion Technologies’ daily performance. The disclosure highlights rising appetite among South Korean investors for...Read full storyTop Stories