KEY TAKEAWAYS
- Bybit’s latest report with Block Scholes shows cautious optimism in crypto markets despite recent volatility.
- Bitcoin and Ethereum have rebounded, supported by Vanguard’s crypto ETF trading, but remain below all-time highs.
- Traders have reduced bearish positions, indicating a shift in sentiment, though risk appetite remains muted.
- Basic Attention Token has surged over 100%, highlighting strong performance in the social token sector.
Bybit, the world’s second-largest cryptocurrency exchange by trading volume, has released its latest Crypto Derivatives Analytics Report in collaboration with Block Scholes. The report reveals cautiously optimistic signals in cryptocurrency markets following a volatile start to December.
The analysis examines market dynamics after a sharp selloff on December 1, triggered by hawkish signals from the Bank of Japan. Despite positive developments, such as Vanguard’s opening of crypto ETF trading, derivatives data suggests traders remain cautious as major cryptocurrencies continue to trade below all-time highs.
Han Tan, Chief Market Analyst at Bybit Learn, noted that cryptocurrencies have faced multiple challenges, including shifting expectations surrounding major central bank policies and concerns over the viability of Decentralized Autonomous Tokens (DATs). He added that major crypto prices are likely to remain influenced by macroeconomic forces in the near term, especially with the pivotal Federal Reserve rate decision looming.
Market Recovery and Trader Sentiment
The report highlights that Bitcoin (BTC) has recovered to a two-week high above $93,000, while Ethereum (ETH) has reclaimed the psychological $3,000 level. This recovery follows the early-December selloff and is supported by positive catalysts, including Vanguard’s decision to open its platform for crypto ETF and mutual fund trading.
Options traders have significantly reduced their bearish positioning, with put-call skew premiums declining sharply from 10-13 percentage points at the start of the month to just 2-4 percentage points currently. This indicates that traders are pricing crash protection with far less premium than just one week ago.
Muted Leverage and Risk Appetite
Open interest in perpetual futures has increased modestly during the recovery, though it remains well below pre-October 10, 2025 levels. The data suggests lower participation rates in leveraged positions, with recent selloffs showing no signs of the liquidation cascades that typically characterize over-leveraged markets.
Block Scholes’ proprietary Risk Appetite Index indicates that while sentiment is shifting positively, market participants have not yet turned bullish. This cautious stance is unsurprising given that both BTC and ETH continue to trade significantly below their all-time high levels. The Risk Appetite Index measures the level of euphoria (above 1) or panic (below -1) in the spot market, showing a strong relationship to spot returns.
The report also spotlights Basic Attention Token (BAT), which has surged over 100% since October 11 to around $0.27, significantly outpacing the broader altcoin recovery. The Ethereum-based token powers Brave browser’s privacy-focused advertising ecosystem, serving over 100 million monthly users, and has helped make social tokens the second-best performing sector over the past month, trailing only privacy coins.
For detailed insights, readers may download the full report here.
Why This Matters: Impact, Industry Trends & Expert Insights
Bybit’s latest report, in collaboration with Block Scholes, indicates cautious optimism in the crypto markets despite a turbulent start to December, highlighting a recovery in Bitcoin and Ethereum prices.
A Coinbase report suggests that improved liquidity and reduced selling pressure from long-term Bitcoin holders might foster a recovery phase in December. This aligns with the observed recovery in Bitcoin and Ethereum prices following the early December selloff.
A Fortune article highlights institutional interest in crypto assets as a sign of market maturation. This supports the notion that positive catalysts, such as Vanguard’s crypto ETF trading, could contribute to a more stable recovery in the crypto markets.
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