Bitcoin extended losses on Monday as derivatives data pointed to a clear risk-off shift in crypto markets.
The largest cryptocurrency hovered just below $70,000 after falling more than 2.8% in 24 hours, though it remains well above recent lows near $60,000. Traders are divided on whether the market is entering a deeper bear phase or approaching a bottom, with some bulls citing the slowing pace of declines as a sign of exhaustion.
The broader crypto market also weakened. The CoinDesk 5 Index (CD5) dropped 3.4%, while Ether underperformed, falling roughly 5% to $2,037 but holding above the $2,000 mark. The CoinDesk 20 (CD20) index declined 3.7% as traders reduced exposure to major tokens.
Derivatives data highlights caution
Bitcoin futures saw open interest fall from $19 billion to $16 billion over the past week, signaling ongoing deleveraging. Funding rates on Bybit (-2.24%) and Binance (-0.5%) flipped negative, indicating growing influence of short sellers.
Options markets reflected the same defensive mood. One-week 25-delta skew rose to 20%, and call dominance fell to 48%, showing increased demand for downside protection. Implied volatility entered extreme backwardation, with front-end volatility hitting 85% compared with about 50% for longer-term contracts, suggesting a sharp premium for near-term hedges.
Liquidations were significant, totaling $397 million in 24 hours, roughly evenly split between longs and shorts. Bitcoin accounted for $234 million, Ether $74 million, and Solana $14 million. Binance data flagged $68,160 as a key level for potential liquidations in the event of further declines.
Rainbow token launch faces setbacks
Crypto wallet Rainbow’s RNBW token struggled after its debut on Ethereum’s Base layer-2 network. The token fell to $0.025, down 75% from its $0.10 ICO two months earlier, before recovering slightly to $0.031.
Delays in token distribution to early buyers and rewards program participants fueled the selloff. U.S. investors will not gain full access to their tokens until December 2026 under the vesting schedule. Rainbow co-founder Mike Demarais attributed the issues to backend infrastructure strain.
Rainbow, known for its gamified wallet features, raised $18 million in a 2022 Series A led by Reddit co-founder Alexis Ohanian’s firm, Seven Seven Six. The token’s fully diluted valuation has now dropped to roughly $31 million from earlier expectations of $100 million.
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