Crypto asset prices have experienced a steady rebound since March 11, with Bitcoin (BTC) briefly surpassing $87,000 and Ethereum (ETH) rising above $2,000.
However, according to the latest report from Bybit in collaboration with Block Scholes, many major cryptocurrencies, including BTC, ETH, and Solana (SOL), are still trading below their year-opening levels. SOL, which saw a significant peak in January, remains down year-to-date.
While the broader market shows signs of improvement, trading activity remains cautious. Derivatives market data reveals that demand for Bitcoin and Ethereum put options continues to rise, indicating persistent hedging behaviour. This suggests a lingering bearish sentiment among traders, as funding rates for BTC and ETH perpetual contracts remain negative, with short sellers still paying long positions.
In addition, perpetual open interest has remained mostly flat, signalling a risk-off approach. Although BTC reached a two-week high of $88,000, trading volumes have stayed significantly lower than in previous weeks, reflecting continued caution in the market. Volatility has also retreated, with implied volatility hitting yearly lows. As a result, options market activity has slowed, with open interest balanced between puts and calls.
“…triggering modest increases in perpetual trade volume, primarily driven by BTC. Still, volumes remain significantly below those recorded earlier this month, when U.S. President Donald Trump proposed a national crypto reserve centered on the four largest tokens,”
the report noted.
The report highlights that bearish sentiment still dominates the market despite positive price movements, as evidenced by ongoing hedging strategies and negative funding rates.
This report aligns with January’s findings, revealing that crypto markets showed limited excitement following Donald Trump’s presidential inauguration despite initial hopes for supportive policies. A notable surge in activity was triggered by the launch of meme coins named TRUMP and MELANIA, which briefly boosted bullish sentiment in derivative markets. However, anticipated significant Bitcoin-related executive orders did not come to fruition, leading to a lack of major market shifts.
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