Bitcoin Tops $123K as Volatility and Funding Rates Surge
Bitcoin surged to a record $123,000 as crypto derivatives activity spiked: volatility smiles skewed higher, perpetual funding rates hit January 2025 peaks, and futures-implied yields inverted. Profit-taking drove a mild pullback to $116,000, while Ethereum rebounded above $3,000, pushing option skews higher. Market-wide, uncertainty over Federal Reserve leadership succession and renewed U.S. tariff threats added further volatility. For traders, elevated volatility and funding rates across spot and crypto derivatives markets underscore amplified risk and opportunity.
Bullish
Bitcoin’s record high and the surge in derivatives metrics—volatility smiles skew, elevated funding rates, inverted futures yields—demonstrate robust bullish momentum. Short-term, increased volatility and high funding rates may trigger profit-taking and sharper price swings, creating trading opportunities. Long-term, sustained demand and strong price levels underpin a positive outlook for Bitcoin and broader crypto derivatives markets, despite macro uncertainties.