The recent report released by Bybit in collaboration with Block Scholes analyzes the panic sell-off in the crypto market and option price movements over the past week.
Risk-off Monday
On Monday, February 3, Trump's tariff threats triggered a mass market sell-off, affecting cryptocurrencies alongside U.S. equities. The market saw $3.1 billion wiped out in perpetual swap open interest across BTC, ETH, XRP, and SOL. Bybit's co-founder and CEO Ben Zhou estimated total liquidations at $8-10 billion based on the platform's data.
Altcoins Took a Hit
Bearish trends dominated the crypto markets following another red Monday. Perpetual swap funding rates for altcoins spiraled downwards, likely due to mass liquidations of long positions. BTC traders, however, managed to keep BTC funding rates neutral.
ETH Readies for a Bumpy Ride
ETH showed less resilience than BTC during the recent turmoil. Its spot prices fell below $2.5k, yet open interest levels remained steady thanks to unexpectedly low volatility in ETH options market. However, ETH's realized volatility surged to almost 140%, indicating further possible risks.
The Bybit and Block Scholes report highlights significant shifts in the crypto markets, focusing on options and volatility, especially in light of fiat market fluctuations.
