CoinDesk 20 Index: 3,278.83 +4.32%
Bitcoin (BTC): $$93,338.67 +1.05%
Ether (ETH): $3,462.51 +3.99%
S&P 500: 6,021.63 +0.57%
Gold: $2,652.77 +1.2%
Nikkei 225: 38,134.97 -0.8%

Bitcoin ticked up following Tuesday's drop below $91,000. BTC rose to over $93,800 and is currently trading around 1.8% higher in the last 24 hours. Bitcoin ETFs saw their second consecutive day of net outflows on Tuesday, losing almost $123 million. This was substantially less than Monday's outflows of almost $440 million. BTC is underperforming the broader digital asset market, as measured by the CoinDesk 20 Index, which is up by over 4.8%. XRP, ADA and AVAX all made double-digit gains.

Ether continued its positive price movement, gaining 4.6% in 24 hours to tease a return to $3,500. The ETH-BTC ratio sits just above 0.037, having increased by over 10% in the last week. Spot ether ETFs in the U.S. registered net inflows both days this week while their BTC equivalents have seen outflows. Activity in the ether options market listed on Deribit is also picking up, with over 2 million contracts active, or open, the most since late June. In notional terms, the open interest stands at $7.33 billion, according to Deribit Metrics.

Traders are piling into derivatives tied to ether, betting on higher prices for the world's second-largest cryptocurrency. Cumulative open interest in perpetual and standard futures contracts has surged to a record 6.32 million ETH, worth over $27 billion, a 17% month-to-date gain, according to data source CoinGlass. The gap between three-month ETH futures and spot prices has expanded to an annualized 16%. This is noteworthy because an elevated premium could generate greater interest in cash and carry trades used to capture the price differential between the two markets.

Bitcoin's bullish momentum has hit a snag this week for several reasons, including weaker demand in the U.S. Now, the Australian dollar-yen exchange rate (the AUD/JPY pair), the classic risk barometer, has turned south again, signaling caution to risk asset bulls.

The Aussie dollar, a commodities-dependent currency, is a proxy for global economic health, particularly for emerging markets and China. On the other hand, the yen is seen as a haven currency that investors turn to during times of stress. Thus, a decline in AUD/JPY is considered a risk-off signal, indicating renewed strength in the yen accompanied by a growing chatter of a possible BOJ interest-rate hike next month.

If that's not enough, markets are second-guessing the possibility of the Federal Reserve cutting rates by another 25 basis points next month and trade war fears are resurfacing with President-elect Donald Trump's plans to impose the supposedly inflationary tariffs on Mexico, Canada and China.

BTC bulls should keep their eyes peeled for round two of the yen-led risk-off scenario, which could potentially push prices well below $90,000.

- Omkar Godbole