Bybit and Block Scholes released a collaborative report analyzing the past week's panic sell-off and option price movements in the crypto market.
Risk-off Week: Market Panic
Early February saw a broad market sell-off triggered by former President Trump's tariff threats, affecting equities and crypto markets. This resulted in $8-10 billion in liquidations, with trading volumes surging to $31 billion on February 2nd.
Altcoins Took a Hit
Altcoins experienced downward pressure due to mass liquidation of long positions. BTC, however, managed to maintain neutral funding rates amidst the sell-off.
ETH Readies for a Bumpy Ride
ETH showed less resilience compared to BTC in the current market turbulence. Spot prices fell below $2.5k, though open interest remained steady due to unexpectedly low volatility in the options market. However, ETH's realized volatility surged to nearly 140%, indicating further risks in the options term structure.
The Bybit and Block Scholes report highlights the importance of BTC maintaining neutral funding rates under market pressure and warns of further potential volatility for ETH.
