Panic premium lingers in options even as bitcoin recovers from lows
TL;DR
Bitcoin has recovered from lows but remains in a downtrend pattern, with $72,000 as a key reversal level. Options show elevated 'panic premium' despite stabilizing leverage, while altcoins outperform during consolidation.
Key Takeaways
- •Bitcoin remains in a pattern of lower highs and lower lows, needing to break above $72,000 to signal a trend reversal.
- •U.S. spot ETFs have shed 100,300 BTC ($6.8 billion), creating selling pressure, while derivatives show stabilizing leverage with rising open interest and positive funding rates.
- •Short-term options exhibit elevated 'panic premium' with $179 million in liquidations, indicating continued trader anxiety despite market recovery.
- •Altcoins are outperforming as traders rotate capital during consolidation, with tokens like MORPHO and KITE showing significant gains.
- •XRP is consolidating with low volatility, suggesting the current downtrend may be nearing exhaustion, with key support at $1.39 and resistance at $1.44.
What to know:
- BTC has rallied from $65,60, but remains in a pattern of lower highs and lower lows.
- A price of $72,000 is the key level to signal a trend reversal.
- U.S. spot ETFs have shed 100,300 BTC ($6.8 billion), while open interest rises to $15.8 billion and funding rates turn positive, signaling stabilizing leverage.
- Short-term options show elevated “panic premium,” liquidations hit $179 million, and altcoins outperform as traders rotate during consolidation.
- BTC has rallied from $65,60, but remains in a pattern of lower highs and lower lows.
- A price of $72,000 is the key level to signal a trend reversal.
- U.S. spot ETFs have shed 100,300 BTC ($6.8 billion), while open interest rises to $15.8 billion and funding rates turn positive, signaling stabilizing leverage.
- Short-term options show elevated “panic premium,” liquidations hit $179 million, and altcoins outperform as traders rotate during consolidation.
The crypto market pulled back from potential peril on Thursday, with bitcoin BTC$68,086.52 rising 3.9% from a local low of $65,600.
Prices advanced overnight, with bitcoin adding 2% since midnight UTC, solana (SOL) gaining 2.7% and ether (ETH) rising 1.2%.
The broader downtrend, however, remains intact with bitcoin printing a series of lower lows and lower highs to give back all of the gains it made in the 12 months ended October 2025.
In the short term, bitcoin needs to break above $72,000 to confirm a bullish shift from the range-bound price action that has seen it float between support and resistance.
Spot bitcoin ETFs in the U.S. have posted their largest drawdown of this cycle, with 100,300 BTC in withdrawals since October. That equates to around $6.8 billion of extra selling pressure on an already fragile market.
Derivatives positioning:
- Market dynamics are stabilizing. Open interest rose to $15.8 billion, signaling a shift from leverage cleanup toward a firmer floor, and retail sentiment is rebounding, with funding rates flipping flat to positive across all venues and hitting 10% on Bybit and Hyperliquid.
- Institutional conviction remains anchored, with the three-month annualized basis persisting at 3%.
- The BTC options market shows a slight shift in sentiment, with 24-hour volume reaching a 51/49 split in favor of calls.
- While the one-week 25-delta skew has jumped to 17%, the implied volatility (IV) term structure remains in short-term backwardation.
- This persistent front-end spike confirms that traders are still paying a "panic premium" for immediate protection, even as longer-dated tenors stabilize near 49%.
- Coinglass data shows $179 million in 24-hour liquidations, with a 56-44 split between longs and shorts. BTC ($59 million), ETH ($46 million) and others ($16 million) were the leaders in terms of notional liquidations.
- The Binance liquidation heatmap indicates $68,400 as a core liquidation level to monitor in case of a price rise.
Token talk
- Altcoins were perky overnight, lending token MORPHO rose by more than 12% since midnight UTC and AI payment token KITE added 11%, extending its 30-day rally of 153%.
- The rotation was also seen among DeFi tokens such as jupiter (JUP), which jumped by more than 3.6% after hitting its lowest point in seven days on Thursday.
- The CoinDesk Smart Contract Platform Select Index (SCPXC) was the best-performing benchmark over the past 24 hours, posting a gain of 2.25%, closely followed by CoinDesk's Memecoin Index (CDMEME), up by 2.2% over the same period.
- The bitcoin-dominant CoinDesk 20 (CD20) gained by 1% as crypto majors posted more restrained gains.
- Altcoins typically perform well during periods of consolidation as traders have the freedom to rotate capital into more speculative bets without risking missing a move on the likes of bitcoin, ether and XRP.
- Bitcoin wallets holding less than 0.1 BTC have increased their share of supply to the highest since mid-2024 even as the price holds around the mid-$60,000s.
- Larger holders with 10 to 10,000 bitcoins — the whales and sharks that typically drive major moves — have reduced their positions since the October peak.
- The divergence supports choppy, fragile price action because retail demand alone cannot sustain rallies when big wallets are distributing into every recovery.
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