Bitcoin’s price rallied back toward $70,000, but derivatives markets show persistent fear. Futures premiums remain below neutral levels, and options data indicates traders are prioritizing protection against further declines. This caution stems from broad risk-aversion and concerns over institutional liquidations and network security, despite recent inflows into U.S.-listed Bitcoin ETFs.
Bitcoin retested the $70,000 level, recovering from a recent low near $62,500. Inflows into Bitcoin exchange-traded funds helped stabilize market sentiment over two days.
U.S.-listed Bitcoin ETFs recorded $764 million in net inflows, partially offsetting $1.2 billion in outflows from the prior eight days. This institutional demand emerges when prices dip below $65,000.
Despite this, the appetite for leveraged bullish positions in BTC futures has dropped sharply. The annualized premium for Bitcoin futures sat at 2%, well below the 5% neutral threshold.
Data from the options market further indicates professional traders are prioritizing the avoidance of downside exposure. Bitcoin put options traded at a 14% premium compared to equivalent call instruments.
In a neutral market, this indicator typically fluctuates between -6% and +6%, signaling fear remains dominant. The recovery to $70,000 has done little to shift the cautious outlook of derivatives traders.
Recently, unproven theories have been proposed to explain Bitcoin’s 32% decline over seven weeks. This trend began after the Oct. 10, 2025, market crash, which eliminated $19 billion in leveraged positions.
Following that event, Binance reportedly provided $283 million in compensation to users affected by liquidations. Binance co-founder Changpeng “CZ” Zhao has refuted allegations the exchange intentionally triggered the crash.
Other participants have linked bearishness to concerns over quantum computing. These fears intensified after Jefferies strategist Christopher Wood removed Bitcoin from his portfolio, citing potential security risks.
The most recent explanation involves the quantitative trading firm Jane Street. Claims gained momentum after Terraform Labs’ court-appointed administrator sued the company, alleging insider trading.
Jane Street’s recent filing disclosed significant holdings in BlackRock’s iShares Bitcoin Trust ETF and various Bitcoin mining companies. However, Julio Moreno, head of research at CryptoQuant, noted such activity is typical for delta-neutral strategies.
