India — Bybit, the world’s second-largest cryptocurrency exchange by trading volume, has released its latest Crypto Derivatives Analytics Report in collaboration with Block Scholes, revealing cautiously optimistic signals in cryptocurrency markets following a volatile start to December.
The analysis examines market dynamics following December 1st’s sharp selloff, triggered by hawkish signals from the Bank of Japan. Despite positive developments, including Vanguard’s opening of crypto ETF trading, derivatives data suggest traders remain cautious, given that major cryptos are still trading well below all-time highs.
“Cryptocurrencies have been buffeted by multiple crosswinds, from shifting expectations surrounding major central bank policies to mounting concerns over the viability of DATs,” said Han Tan, Chief Market Analyst, Bybit Learn. “Major crypto prices are likely to remain beholden to macro forces over the immediate term, especially with the pivotal Fed rate decision looming, even as the crypto world attempts to shake off the ghosts of the Oct 10 liquidation event,” he added.
Key Highlights:
● Market Recovery Underway: BTC has recovered to a two-week high above $93,000, while ETH reclaimed the psychological $3,000 level following a sharp early-December selloff triggered by hawkish signals from the Bank of Japan. Positive catalysts, including Vanguard’s decision to open its platform for crypto ETF and mutual fund trading, have supported the rebound.
● Subdued Downside Fear: Options traders have significantly reduced their bearish positioning, with put-call skew premiums declining sharply from 10-13 percentage points at the start of the month to just 2-4 percentage points currently. This indicates traders are pricing crash protection with far less premium than just one week ago.
● Muted Leverage Activity: Open interest in perpetual futures has increased modestly during the recovery, though it remains well below pre-October 10, 2025, levels. The data suggests lower participation rates in leveraged positions, with recent selloffs showing no signs of liquidation cascades that typically characterize over-leveraged markets.
● The Fading Bear: Block Scholes’ proprietary Risk Appetite Index indicates that while sentiment is shifting in a positive direction, market participants have not yet turned bullish. This cautious stance is unsurprising given that both BTC and ETH continue to trade significantly below their all-time high levels.
Block Scholes’ Risk Appetite Index measures the level of euphoria (above 1) or panic (below -1) in the spot market. Momentum in this index shows a strong relationship to spot returns.
The report also spotlights Basic Attention Token (BAT), which has surged over 100% since 11 October to around $0.27, significantly outpacing the broader altcoin recovery. The Ethereum-based token, which powers Brave browser’s privacy-focused advertising ecosystem serving over 100 million monthly users, has helped make social tokens the second-best performing sector over the past month, trailing only privacy coins.
For detailed insights, readers may download the full report.
