Persistent Bearish Derivatives Weigh on Crypto Despite Short-Lived Rally

A relief-driven bounce supported by recovering U.S. equities helped BTC and ETH recover from weekly lows, though bearish derivatives positioning and negative CVD readings suggest the rebound could be fragile.

The crypto market showed early signs of stabilization on Thursday, with Bitcoin (BTC) up 1.1% since midnight UTC after briefly falling below $60,000 on Wednesday—its weakest level since October 2024.

Despite the recovery, Bitcoin remains at a key technical level, where a breakdown could expose downside toward $52,000. For now, price action suggests the market has temporarily steadied.

Ether (ETH) also rebounded, rising 1.5% to around $1,644 after briefly sliding to $1,550 during Wednesday’s late-session selloff.

The recovery in crypto mirrored a broader rebound in U.S. equity futures, with the S&P 500 up 0.7% and the Nasdaq 100 gaining 2.2%.

Derivatives positioning

Bitcoin briefly revisited the $59,000 zone on Wednesday before bouncing above $61,000, with volatility triggering widespread liquidations across leveraged futures. Nearly $1 billion in positions were wiped out in 24 hours, with long trades accounting for most of the losses.

Bitcoin futures open interest has climbed to 763K BTC, the highest since early June, after previously holding near 730K BTC. However, the increase is not purely bullish, as funding rates have turned negative—signaling stronger demand for downside exposure.

Ether futures show little change in open interest, with funding rates still slightly positive. Solana (SOL) remains near record-high open interest with neutral funding, while XRP also shows balanced positioning near recent highs.

Across major assets, the OI-adjusted 24-hour cumulative volume delta remains negative for a third straight session, indicating that aggressive selling continues to dominate spot price action.

Volatility has eased, with Bitcoin’s 30-day implied volatility index (BVIV) falling from 51% to 46%, reflecting reduced demand for hedging and helping support the short-term rebound. Ether’s implied volatility (EVIV) has followed a similar trend.

Still, ETH continues to trade at a volatility premium over BTC, with implied vols roughly 10 points higher across maturities.

Options skew remains heavily tilted toward downside protection, with Bitcoin’s one-week skew showing about a 25-point premium for puts—highlighting persistent hedging demand despite the bounce.

Token activity

Altcoins staged a sharp but uneven rebound after Wednesday’s selloff, reflecting thin liquidity conditions.

Jupiter (JUP) dropped more than 12% in six hours before rebounding over 18%, highlighting extreme two-way volatility and forced liquidations.

Overall, about $1 billion in crypto futures positions were liquidated in the past 24 hours, with roughly $585 million concentrated in altcoins.

DeFi tokens such as AAVE and ETHFI outperformed, gaining 2.5% and 4.7%, respectively.

AI-related tokens lagged, with RENDER and NEAR slipping between 0.8% and 1.9% despite broader market gains.

Solana (SOL) fell to $64 on Wednesday, extending a 75% decline since September. A break below the June 6 low of $60 would mark its weakest level since December 2023.