Bitcoin recovers from monthly low amid signals of short-term stress in derivatives: Crypto Markets Today

Bitcoin rebounds from $86,000 amid persistent downtrend; risk-off sentiment lifts gold and silver

Bitcoin (BTC $87,754) bounced off a one-month low of $86,000 on Sunday, coinciding with the reopening of CME futures at 23:00 UTC. The cryptocurrency climbed more than 2% over the next nine hours before losing momentum near $88,250.

Despite the rebound, bitcoin remains in a prolonged downtrend, marked by a series of lower highs and lower lows since October, reflecting early signs of a bear-market correction. Sunday’s selloff was driven by risk-off sentiment following a volatile week, including U.S. President Donald Trump’s speeches in Davos on Greenland, tariffs, and global geopolitical tensions.

The risk-off environment pushed gold and silver to record highs, reinforcing bitcoin’s status as a risk asset that tracks equities more closely than traditional safe havens.

Derivatives show near-term stress

BTC futures open interest held at $22.6 billion despite the drop, signaling a pause in deleveraging. Funding rates averaged around 5% annualized, with OKX diverging at -3.8%, indicating localized bearish bets. The three-month annualized basis on Binance and Deribit rose just above 5%, suggesting renewed institutional interest amid consolidation.

Options markets reflected high conviction, with a 15% one-week 25-delta skew and 58% of 24-hour volume in calls. The implied volatility term structure shifted into backwardation, with front-end volatility spiking to 41.5% and trending toward 47% in late 2026. Coinglass reported $744 million in 24-hour liquidations, led by ETH ($273M), BTC ($207M), and SOL ($63M), with $88,370 flagged as a critical liquidation level on Binance.

Altcoins rebound

Altcoins showed resilience overnight. Ether (ETH $2,929) and XRP ($1.89) rose 2.8%, while Zcash (ZEC $381) and Monero (XMR $467) gained 6% and 3%, respectively. Metaverse tokens outperformed, with Axie Infinity (AXS) surging 23% and the CoinDesk Metaverse Select Index (MTVS) rising 6.9%, contributing to a 34.4% year-to-date rally.

The CoinDesk 20 (CD20) Index has declined 0.52% since January 1, while the altcoin-heavy CoinDesk 80 (CD80) is up 2.5%, reflecting relative altcoin strength. RIVER, the token of its stablecoin protocol, has soared over 2,100% in 30 days, including a 34% gain in the past 24 hours. The “altcoin season” indicator stands at 28/100, up from last month’s 16/100 but below September’s high of 76/100.

Since October’s $19 billion liquidation cascade, thin liquidity and shallow order books have amplified altcoin volatility, producing dramatic selloffs and recoveries, as observed on Sunday.