Bitcoin's (BTC) price volatility has escalated to its highest point since March 2025, signaling a return to turbulent market conditions as the asset reacts sharply to shifting sentiment. The monthly volatility metric rose to 2.63% for the latest 30-day estimate, a significant increase from January's lows of under 1%. This marks six consecutive weeks of growing volatility.
Despite the heightened volatility, BTC's price action has been characterized by choppy, sideways trading. The coin recently recovered close to $70,000 on rumors that Jane Street had halted its daily selling, only to dip again to $65,000. As of February 27, BTC traded at $65,987.77, logging over 16% in losses for the month to date and a 24% decline for the first quarter of 2026. Historically, this period is notable as BTC is on track to record losses in both January and February for the first time in its trading history.
Concurrently, derivatives data reveals a cautious and slightly bearish stance among traders. Aggregate long/short ratios for BTC perpetual futures across major exchanges Binance, OKX, and Bybit show a consistent short bias. The overall aggregated ratio settled at 48.8% long positions against 51.2% short, with Bybit showing the most pronounced bearish tilt at 51.81% short. This data, from April 2025, indicates a measured lean toward bearish expectations among active derivatives traders.
The futures market itself shows signs of deleveraging, with aggregate open interest down to a one-year low of $19.74 billion. Analysts note that this environment, combined with neutral to slightly negative funding rates, reflects a market in a state of equilibrium with a risk-averse tilt. "A sustained but mild short bias in perp futures, especially when funding is flat, often reflects hedging activity by large holders or institutions," noted a derivatives strategist, suggesting it may be more about risk management than outright bearish speculation.
Broader market sentiment remains weak, with the Crypto Fear and Greed Index stuck in 'extreme fear' territory throughout February. BTC has also underperformed compared to other major assets in 2026, lagging behind gold, silver, and the NASDAQ. Some trading indicators point to the potential formation of a market bottom following a sharp capitulation event, but there are no immediate signs of rebuilding leverage, which is a key driver of directional price moves.
