Bitcoin attempts a rebound, but derivatives markets remain firmly bearish

Minseung Kang

Summary

Bitcoin is attempting to reclaim the $70,000 level, but derivatives markets are said to be dominated by defensive positioning.
The funding rate for bitcoin perpetual futures is negative, and futures open interest (OI) is down about 51% from the peak in October last year.
With leverage influence fading and implied volatility falling, a range-bound consolidation is seen as likely, while U.S. economic data and political and financial events in major countries are weighing on sentiment.

Bitcoin (BTC) is trying to reclaim the $70,000 level, but derivatives markets still show a dominant defensive bias. Despite the price bounce, investors’ risk appetite has not shown a clear recovery, according to market assessments.

According to Bloomberg on the 9th, funding rates for bitcoin perpetual futures remain in negative territory. This structure requires long position holders to pay shorts, suggesting market participants are positioning for the risk of further declines.

Open interest (OI) trends are also undermining confidence in the rebound. Bitcoin futures open interest is down about 51% from its peak in October last year, and it has not shown meaningful signs of recovery even during the recent upswing. Although bitcoin rebounded from the low $60,000s to around $70,000, new leverage-driven bets remain limited.

The market points to the sharp contraction in liquidity and market depth since the steep selloff on Oct. 10 last year as a key backdrop.

Options markets are also reflecting a cautious tone. Bitcoin implied volatility has fallen sharply over a short period, but it suggests investors are placing more weight on defensive strategies than on abrupt additional swings.

Some analysts say reduced leverage is helping to damp volatility, while others interpret the move as investors taking profits or cutting losses at relatively lower price levels and shifting into a wait-and-see phase. In this environment, a range-bound consolidation is seen as more likely than a swift rebound.

Investor sentiment is also being constrained by this week’s releases of U.S. economic data and a series of political and financial events in major countries. Rather than making a call on near-term direction, participants appear to be staying cautious while bracing for additional volatility.

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