Key Highlights
- Bitcoin rebounds near $70K, but traders stay cautious as derivatives and futures show weak conviction and defensive positioning.
- Open interest drops to $21.6B, signaling reduced leverage; liquidity remains thin since October’s crash, keeping investors careful.
- $354M liquidated in 24h, Bitcoin leads losses; short-term data shows traders actively managing risk amid volatile market swings.
Bitcoin’s (BTC) recent recovery toward $70,000 masks caution among traders, as derivatives markets continue signaling bearish sentiment, as per Bloomberg. Despite a sharp rebound from $60,033 last Thursday to highs above $70,000 on Friday, market positioning remains defensive.
As per the report, funding rates on Bitcoin perpetuals, which show the cost of holding long versus short positions, are still below zero. This means traders want extra incentive to bet on price increases. At the same time, open interest in Bitcoin futures hasn’t bounced back since its October drop, falling 51% from its peak, highlighting that many investors are cautious about the recent rally.
As per CryptoQuant data, open interest in Bitcoin started from $7-8 billion at the beginning of 2023, gradually rose to $45 billion at the end of 2025, reflecting the appreciation of Bitcoin from $25,000 to more than $100,000 in the same time period. As of now, however, open interest stands at $21.6 billion as Bitcoin corrects to a price of $68,900 in early 2026.
This sharp decline suggests traders are reducing leveraged positions amid uncertainty. Andy Martinez, Chief Executive of Crypto Insights Group, told Bloomberg, “Liquidity and market depth have reduced significantly since the Oct.10 crash and that has prompted people to take less leveraged bets and act more conservatively.”
Weak derivatives response
The muted derivatives response follows extreme volatility late last week. Bitcoin’s price plunged to $60,033 before rebounding, yet open interest failed to increase on Monday despite the bounce. “Think the market is still trying to grasp what’s happened since 10/10,” Martinez added.
Additionally, the options markets are also reflecting a cautious approach, as Bitcoin’s implied volatility levels decreased from 83% to about 60%. This indicates reduced expectations for large price moves. However, the 25-delta call-put skew is very biased towards put options.
Griffin Ardern, Head of Research at BloFin, noted, “The impact of leverage on market prices has significantly decreased, helping to reduce volatility and stabilize prices.”
Market liquidity and macro concerns
Traders are staying cautious because the market has less liquidity and faces bigger global risks. Le Shi, Managing Director at Auros in Hong Kong, pointed out worries like political changes in Japan, swings in precious metals, and the recent AI-driven stock rally.
As a result, many investors are stepping back, watching from the sidelines, or exiting the market temporarily. The recent liquidations show just how shaky things remain. In the past 24 hours, as per Coinglass, $353.72 million worth of positions were wiped out, impacting over 96,000 traders. Bitcoin alone lost $197.93 million, mostly from short positions, while Ethereum saw $68.83 million in losses.
Recent short-term liquidation data highlights how actively traders are managing risk. Long positions lost $180.77 million, while short positions saw $172.94 million wiped out. The single biggest liquidation hit $18.85 million on Hyperliquid for the BTC-USD pair. Looking closer, hourly and four-hour data show that shorts dominated shorter time frames, while long positions took the heaviest losses over 12 hours.
Also Read: Binance Adds 4,225 BTC to SAFU Fund Amid Market Dip
