Key takeaways:
Bitcoin derivatives show persistent fear despite the current rally toward $70,000, as seen by futures premiums being pinned well below neutral levels.
The markets’ cautious stance stems from broad risk-aversion and lingering concerns over institutional BTC liquidations and Bitcoin network security.
Bitcoin (BTC) retested the $70,000 level on Wednesday, recovering from Tuesday’s low of $62,500. While inflows into Bitcoin exchange-traded funds (ETFs) helped stabilize market sentiment, the momentum failed to restore confidence within the BTC derivatives markets. Traders remain concerned that underlying factors are preventing a sustained rally toward $75,000.
Bitcoin US-listed ETFs daily net flows, USD million. Source: Farside Investors
US-listed Bitcoin ETFs recorded $764 million in net inflows over two days, partially offsetting the $1.2 billion in outflows seen during the previous eight trading days. These large movements are typically attributed to institutional activity, suggesting strong demand when prices dip below $65,000.
Despite this demand, the appetite for leveraged bullish positions in BTC futures has dropped sharply.
BTC two-month futures annualized premium. Source: Laevitas.ch
The annualized premium for Bitcoin futures relative to spot markets sat at 2% on Thursday, remaining well below the 5% neutral threshold. Bullish momentum has been largely absent since Jan. 31, the date Bitcoin surrendered the $85,000 support level after holding it for over nine months. Data from the options market further indicates that professional traders are prioritizing the avoidance of downside exposure.
BTC 30-day options delta skew (put-call) at Deribit. Source: Laevitas.ch
Bitcoin put (sell) options traded at a 14% premium compared to equivalent call (buy) instruments on Thursday. In a neutral market environment, this indicator typically fluctuates from -6% to +6%, signaling that fear remains a dominant force. Although this skew metric has improved from the 28% “panic” levels recorded on Tuesday, the recovery to $70,000 has done little to shift the cautious outlook of derivatives traders.
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