The cryptocurrency market is experiencing a gradual recovery following last week's sharp downturn, with Bitcoin trading above $91,000 and Ethereum over $3,000. A Bybit report, in collaboration with Block Scholes, highlights stabilizing derivatives contracts amid improved global risk appetite and positive macroeconomic signals. Traders remain cautious, as shown by subdued participation in altcoin derivatives.
Over the past week, Bitcoin and other crypto assets have rebounded from extreme bearishness, with many reaching levels not seen in seven months during the prior sell-off. According to a report by Bybit and data platform Block Scholes, the derivatives market is showing signs of stabilization. Bitcoin has climbed to around $91,362, marking a 1.18% increase in the last 24 hours and 5.1% over the week, while Ethereum has surged 1.97% to $3,033.
This recovery aligns with broader improvements in investor sentiment and macroeconomic conditions, including upward movement in the S&P 500 and the end of the U.S. government shutdown, which may lead to a 25 basis point Federal Reserve rate cut at the upcoming FOMC meeting. In derivatives, Bitcoin and Ethereum perpetual swaps have recorded several sessions of positive funding rates this week, indicating longs paying shorts and signaling bullish positioning among leveraged traders. These rates remained positive throughout the sell-off for BTC and ETH, unlike altcoins, which underperformed and saw pairs pay premiums for leveraged short exposure during last weekend's turbulence.
Open interest and trading volumes in altcoin derivatives remain low since the October 10 liquidation event, reflecting cautious participation. Short-term implied volatility has normalized, with traders pricing out extreme downside fears. The report notes: “Short-tenor implied volatility levels no longer trade at such an extreme premium after the normalization of the term structure of volatility, and puts no longer hold as strong a premium above calls (despite not fully pricing out a preference for downside protection).” Options markets show a slight reduction in put-call skew, indicating less bearish bias.
Large-cap altcoins like Solana (SOL), Toncoin (TON), Cardano (ADA), and Curve DAO (CRV) have led the recovery, attracting significant open interest in perpetual swaps. While the market shifts from fear, traders maintain measured caution rather than full optimism.