Derivatives Market Data Shows Investors Still Leaning Towards Caution, Bullish Momentum Yet to Emerge

On February 9, even as Bitcoin rebounded to nearly $70,000, its derivatives market continues to send a warning signal. Traders are still holding defensive positions, with little to no sign of fresh long bets. Bitcoin’s perpetual contract funding rate — the fee exchanged between long and short holders — remains negative, a bearish sign indicating traders are still positioning for downside moves or only willing to hold long positions if compensated. Meanwhile, Bitcoin perpetual futures open interest has failed to recover since dropping from its October peak, underscoring a lack of confidence in the recent rebound. Data from Coinglass shows current open interest is 51% below the October high. Despite Bitcoin bouncing back from nearly $60,000 to around $70,000, open interest showed no sign of recovery on Monday. “Since the October 10 market crash, liquidity and market depth have plunged significantly, pushing people to cut leveraged bets and adopt more conservative strategies,” said Andy Martinez, CEO of Crypto Insights Group. “I think the market is still trying to parse everything that’s happened since October 10.” Griffin Ardern, BloFin’s Director of Research and Options Trading, noted the options market tells a similar story. Bitcoin’s implied volatility has dropped sharply from ~83% last Thursday to around 60% now, reflecting reduced expectations of big price swings. Still, positioning indicators remain defensive: the skew of 25-delta put-call options (a measure of fear vs. greed in option pricing) heavily favors puts, signaling strong demand for downside protection. “Leverage’s impact on market prices has fallen sharply, helping to lower volatility and stabilize prices,” Ardern added. “But this also means many investors are taking profits or cutting losses at relatively low levels, shifting to a wait-and-see stance or even exiting the market temporarily.” He further noted a market dominated by bearish sentiment typically signals consolidation, not a rapid rebound. A packed macro agenda has also amplified market caution. “Despite late-week market support, participants remain extremely cautious due to a flood of potential market-moving events,” said Le Shi, Managing Director of Market Maker Auros Hong Kong. He cited risks including developments in Japan’s political situation, precious metals volatility, and concerns over an AI-driven stock market rally.