bitcoin recovered after falling to $86,000, its lowest point in more than a month, on Sunday.
The bounce occurred alongside the opening of bitcoin futures trading on the CME at 23:00 UTC. The largest cryptocurrency rose more than 2% in the following nine hours before losing strength to $88,250.
Zooming out, Bitcoin remains in a grueling downtrend characterized by a series of lower highs and lower lows that began in October to create the etchings of an early bear market reversal.
Sunday’s sell-off was driven by investors’ continued risk aversion after a volatile week in which US President Donald Trump gave several speeches in Davos related to Greenland, tariffs and geopolitical conflicts around the world.
That sentiment lifted precious metals gold and silver to record highs, diminishing bitcoin’s reputation as a safe-haven asset and cementing it as a risk asset that, for the most part, moves alongside U.S. stocks.
Derivatives positioning
By Saksham Diwan
- BTC futures open interest (OI) stabilized at $22.6 billion despite downward price volatility, signaling a pause in recent deleveraging.
- While funding rates have neutralized around 5% annualized on most exchanges, OKX has diverged at a rate of -3.8%, reflecting localized hedging or bearish bets.
- In contrast, the 3-month annualized base on Binance and Deribit rose to just over 5%, suggesting that while the speculative froth has restarted, institutional appetite is starting to firm up during this consolidation.
- BTC options indicate high conviction with a 25 delta one-week bias of 15% and call dominance of 58% on 24-hour volume.
- The term structure of implied volatility (IV) has moved from contango to forwardation, with short-term rates higher than those further away.
- Initial volatility spiked to 41.53% (Jan 30) relative to the ~39% drop in the middle of the curve before rising to 47% by the end of 2026.
- This structure highlights a significant premium for short-term positioning, as the market prepares for immediate price action while maintaining a long-term bullish outlook.
- Coinglass data shows $744 million in 24-hour liquidations, with a 77-23 split between long and short positions. ETH ($273 million), BTC ($207 million), and SOL ($63 million) were the leaders in terms of notional settlements. The Binance settlement heatmap indicates $88,370 as the central settlement level to monitor, in case of a price drop.
symbolic talk
By Oliver Knight
- As Bitcoin continues to show weakness, the altcoin market showed some resilience overnight.
- Ether and xrp both are up 2.8% since midnight UTC, while zcash privacy coins and monero they gained 6% and 3%, respectively.
- The best-performing corner of the altcoin market was metaverse tokens, with axie infinity (AXS) rising more than 23%, while the CoinDesk Metaverse Select Index (MTVS) rose 6.92% since midnight to add to a 34.4% year-to-date rally.
- The bitcoin-dominant CoinDesk 20 (CD20) index has now lost 0.52% since the turn of the year, while the altcoin-heavy CoinDesk 80 (CD80) is in the black, having risen 2.5%, demonstrating relative strength among altcoins.
- RIVER, the native token of its namesake stablecoin protocol, has been the most prolific altcoin over the 30 days, surging over 2,100% after another 34% bullish move in the past 24 hours.
- The “altcoin season” indicator is currently at 28/100, still well below September’s high of 76/100, but significantly higher than last month when it read 16/100.
- The lack of market liquidity and depth since October’s $19 billion liquidation cascade means that altcoin moves have been more exaggerated in both directions, leading to large numbers of liquidations during liquidations like Sunday’s, as well as dramatic rallies as traders navigate thin order books.
