Bybit: Crypto Derivatives Show Most Extreme Bearish Positioning Since 2022 FTX Collapse
Bybit’s joint report with Block Scholes finds crypto derivatives markets at their most extreme bearish positioning since the 2022 FTX collapse following Bitcoin’s Feb 5 flash crash to ~$60,000. Key data: 7‑day BTC implied volatility topped 100%, short-dated BTC and ETH implied volatility hit multi‑year highs, and demand for downside protection surged. Bitcoin has fallen roughly 50% from its October 2025 all‑time high and traded around $66,000 as of Feb 13, 2026. Major altcoins experienced deeper losses—ETH traded below $2,000, SOL plunged more than 70% from recent highs, and large‑cap tokens including ETH, XRP and BNB are down over 60% from peaks. Perpetual funding rates turned decisively negative across many altcoins (example: SOL 7‑day avg funding ≈ -0.04%), indicating shorts are paying premiums to hold bearish positions. Unlike some past crashes, BTC dominance remained relatively stable, implying proportional capital outflows across the market rather than rotation into Bitcoin. Bybit’s analysts — citing “extreme fear” sentiment and concentrated derivatives positioning — warn a sustained near‑term rebound is unlikely. The full Bybit x Block Scholes report includes detailed spot, futures and options analysis and is available for download.
Bearish
The report highlights concentrated bearish derivatives positioning, surging implied volatility (7‑day BTC IV >100%), and a sharp BTC drawdown (~50% from the October 2025 peak). Short-dated BTC/ETH vol spikes and increased demand for downside protection suggest traders expect further downside or elevated risk. Negative funding rates on many altcoins indicate active paid shorts, increasing downside pressure. Stable BTC dominance implies losses are broad‑based rather than a rotation into BTC, reducing the chance of BTC relative outperformance. In the short term this is likely to keep selling pressure and volatility elevated, limiting a sustained rebound. Longer term, extremes in derivatives positioning and very high implied vols can precede mean reversion once liquidity and sentiment normalize, but timing is uncertain. Overall, the indicators and market structure described point to a near‑term bearish outlook for the mentioned cryptocurrencies, especially BTC and the large altcoins.