Bitcoin rebounds to $71.5K but derivatives show traders remain wary
Bitcoin rallied above $71,000 (peaking around $71.5K) after dropping to about $60,150, recovering roughly 17% since that low. However, derivatives metrics point to persistent trader caution. Aggregate liquidations of leveraged long Bitcoin futures reached about $1.8 billion over five days, while futures open interest remained roughly flat at 527,850 BTC (notional value fell from $44.3B to $35.8B, mirroring a 20% price decline). The 2-month futures annualized basis fell to 2%—the weakest in over a year—signalling low demand for bullish leverage. In options markets, the 2-month put-call skew jumped to 20%, an extreme level that often reflects panic and elevated demand for downside protection. Analysts interpret these signals as evidence that whales, market makers or hedge funds may have been hit during the sell-off, reducing confidence that the rebound will sustain. Key metrics to watch: futures open interest, basis/premium (currently ~2% annualized), aggregate liquidation figures (~$1.8B), and the options skew (20%). This environment suggests limited appetite for leveraged longs and a heightened probability of further downside until derivatives indicators normalize. (Not investment advice.)
Bearish
Although spot BTC recovered to about $71.5K, multiple derivatives indicators point to fragile market conviction. Large aggregated long liquidations (~$1.8B) and a sharp fall in futures basis to ~2% show demand for bullish leverage is low. The 2-month options put-call skew at 20% signals elevated fear and demand for downside protection. Historically, similar patterns—big long liquidations combined with high skew and compressed basis—precede extended volatility and additional downside (e.g., prior major liquidation events). In the short term, low leverage appetite and persistent fear increase the chance of pullbacks or range-bound trading, since fewer leveraged buyers are available to fuel momentum. In the medium to long term, if derivatives metrics normalize (basis rises toward 5–10% and skew drops), confidence could return and a sustained rally becomes more likely. Until then, the balance of risk favors further weakness or choppy price action rather than a confident continuation of the rally.