Bitcoin experienced a significant 10% correction, testing the $81,000 support level as investor fear spiked. Options markets show the highest level of bearish sentiment in a year, driven by over $2.7 billion in outflows from U.S. spot ETFs and renewed concerns over quantum computing threats to blockchain security. Despite substantial liquidations of leveraged positions, analysts note the purge of excessive leverage may lead to a more stable market.
Bitcoin retested the $81,000 level following a sharp 10% correction, its first visit there in over two months. The move coincided with significant outflows from spot Bitcoin exchange-traded funds and a drop in gold prices.
U.S.-listed spot Bitcoin ETFs have seen $2.7 billion in net outflows since mid-January, representing 2.3% of total assets. Some market participants worry institutional demand has stalled, while others note gold’s recent gains may have temporarily overshadowed Bitcoin’s appeal.
Anxiety was further fueled by discussions on quantum computing threats to blockchain cryptography. Coinbase formed an independent advisory board to evaluate these risks, with plans to release public research by early 2027.
Cryptographer and Blockstream co-founder Adam Back predicted no material quantum risk over the next decade. Back argued that the technology remains at a very early stage, and even partial breaks in cryptography would not allow Bitcoin to be stolen.
The BTC options delta skew surged to 17%, its highest point in over a year and indicating extreme fear. This often leads to volatile price swings as market makers hedge against further downside.
Approximately $860 million in leveraged long BTC futures positions were liquidated over two days. However, aggregate BTC futures open interest has fallen to $46 billion from $58 billion three months prior.
Declining interest in leveraged futures is not always a bearish signal, as the market may be healthier after excessive leverage is purged. Analysts also look at stablecoin demand in China to gauge risk appetite.
The current 0.2% discount for Tether against the yuan suggests moderate outflows, an improvement from last week’s 1% discount. Bitcoin derivatives reflect a cautious mood following a 13% price drop over two weeks.
