Recent analysis from onchain options platform Derive.xyz and a report from crypto exchange Bybit indicate a significant shift in cryptocurrency market sentiment, with Bitcoin (BTC) trading volume declining by 25% as panic selling subsides. Dr. Sean Dawson, head of research at Derive.xyz, highlighted that BTC has staged a strong rebound, rallying over 10% from $82,000 to $91,500, driven by recovering expectations of a Federal Reserve rate cut. The probability of a 25 basis point cut at the upcoming FOMC meeting surged from 39% to nearly 87%, easing bearish pressure that dominated options markets in late October and November.
Key metrics show improved trader confidence, with the 25-delta skew for BTC options moving from -7% to -5% over 30 days and from -10% to -4% over 7 days, indicating reduced demand for downside protection. Volatility has compressed by almost 25%, from ~60% on November 21 to around 45%, as liquidity improves and panic flows subside. Derivatives flow data from Derive.xyz over the past 24 hours revealed that 41.2% of BTC contracts were puts sold, 26.5% were calls bought, and only 23.1% were puts bought, signaling a shift toward bullish positioning.
Concurrently, Bybit's report in collaboration with Block Scholes notes a gradual recovery in the derivatives market, with BTC and Ethereum (ETH) bouncing back to levels above $92,000 and $3,000, respectively. Perpetual swaps for BTC and ETH recorded positive funding rates, while altcoins like Solana (SOL), Toncoin (TON), Cardano (ADA), and Curve DAO (CRV) showed improved open interest but underperformed in funding rates during the sell-off. The recovery aligns with a positive macroeconomic landscape, including the end of the U.S. government shutdown and upward movement in the S&P 500, further supporting market stability.
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