Bybit x Block Scholes: BTC fell after touching $88K but bearish derivatives trend holds

**Crypto Derivatives Market Shows Cautious Rebound: Weekly Insights from Major Exchange**

The world’s second-largest cryptocurrency exchange by trading volume has released its latest weekly crypto derivatives analytics report, compiled in collaboration with Block Scholes. This report offers valuable insights into macroeconomic trends, the current state of crypto spot and derivatives markets, and emerging trading signals.

### Key Insights:

Since reaching a low point on March 11, crypto asset prices have steadily increased over the past two weeks. Bitcoin (BTC) briefly surpassed $87,000, and Ethereum (ETH) rose back above $2,000. XRP has remained relatively stable, but Bitcoin, Ethereum, and Solana (SOL) continue to trade below their opening levels for the year. Notably, SOL, which saw a peak in January following the Cboe filing for a Solana Spot ETF, is also down year-to-date. While the broader market is showing signs of recovery, derivatives activity reflects caution. Demand for BTC and ETH put options remains high, indicating that hedging behavior is still prevalent.

### Cautious Rebound in Perpetuals

Perpetual open interest remained mostly unchanged throughout the week, signaling a risk-off market sentiment. During a brief market rebound, Bitcoin’s price rose to $88,000, a two-week high, sparking modest increases in perpetual trade volumes, particularly for BTC. However, trading volumes are still significantly lower compared to earlier in the month when U.S. President Donald Trump proposed the creation of a national crypto reserve based on the four largest tokens.

### Funding Rates Suggest Persistent Bearish Sentiment

Despite a decrease in realized volatility and positive price movement in major assets, BTC and ETH perpetual contracts continued to show negative funding rates. This indicates that short sellers are still paying long positions, pointing to ongoing bearish sentiment. In contrast, large-cap altcoins exhibited more mixed positioning, with funding rates fluctuating between positive and negative without a clear directional bias.

### Volatility Retreats to Yearly Lows

Implied volatility saw a decline of 3 to 5 points over the past week, with 30-day options now trading at their lowest levels since the start of the year. Realized volatility is also approaching the 30% floor, last observed in February. As is typical in low-volatility environments, options market activity has slowed down. Open interest remains low and relatively balanced between puts and calls. In total, around $40 million in options expired during the week.

In summary, while the market is showing some signs of recovery, cautious sentiment and bearish positioning in derivatives markets suggest that traders are still wary of future price movements. The volatility retreat has led to a quieter options market, signaling a period of consolidation as the crypto landscape remains uncertain.