KEY TAKEAWAYS
- Bybit and Block Scholes released a report analyzing crypto derivatives amid the latest FOMC meeting’s rate cut.
- Open interest in perpetuals remains low, with retail traders hesitant to re-enter positions.
- Options markets show bearish sentiment, with a premium on out-of-the-money puts for Bitcoin and Ethereum.
- Despite the Fed’s positive economic outlook, crypto derivatives sentiment remains cautious.
Bybit, the world’s second-largest cryptocurrency exchange by trading volume, in collaboration with Block Scholes, has released its latest Crypto Derivatives Analytics Report. The report analyzes market conditions surrounding the year’s final Federal Open Market Committee (FOMC) meeting, where policymakers implemented a 25 basis point rate cut. Despite this move, Chair Jerome Powell’s comments left the door open for either a pause or another cut in January 2026, resulting in a muted response across crypto markets.
The report highlights several key findings. In the perpetuals market, open interest remains significantly lower than pre-October 10 levels. Funding rates in leveraged contracts indicate that retail traders are hesitant to re-enter positions in perpetual swap contracts.
In the options market, volatility smiles are bearish for both Bitcoin (BTC) and Ethereum (ETH). The report notes a near 5 percent premium for out-of-the-money (OTM) puts over calls for both short-dated and long-dated options. This suggests that those anticipating a ‘Santa rally’ may be disappointed based on current derivatives market positioning.
The analysis reveals minimal shifts in perpetual swap activity, subdued implied volatility, and continued skepticism in options positioning. Despite the Federal Reserve’s improved economic outlook, sentiment in crypto derivatives remains cautious. BTC’s spot price is still 28 percent below its all-time high, and options markets continue to price in significant downside protection. Traders have yet to identify strong catalysts to support a late-year resurgence.
Han Tan, Chief Market Analyst at Bybit Learn, commented on the broader macroeconomic factors influencing crypto market reactions. He noted that the Fed’s policy outlook will shape market responses to upcoming U.S. jobs and inflation data releases. Tan stated, “Crypto bulls still have their work cut out to get any upside momentum going, considering that digital assets could only muster a tepid response to the final FOMC meeting of 2025, in stark contrast to global equities that surged to new record highs.”
The report concludes that traders show limited appetite for re-engaging with leverage, while options markets continue to indicate caution across both short and long horizons. Current positioning suggests a tempered outlook for any year-end rebound. For detailed insights, readers may download the full report here.
Why This Matters: Impact, Industry Trends & Expert Insights
Bybit and Block Scholes’ report highlights that despite a rate cut by the Federal Reserve, sentiment in crypto derivatives remains cautious, with low open interest and bearish options positioning.
Recent industry reports indicate a cautious sentiment in perpetuals and options markets, with low open interest and bearish volatility smiles. This aligns with the muted response observed in the crypto derivatives market following the Fed’s latest monetary policy announcement.
A report by Investing News highlights that despite short-term volatility due to Fed policy uncertainty, there is a generally positive long-term outlook for cryptocurrencies. This supports the report’s conclusion that traders remain cautious in the current market environment, awaiting stronger catalysts for a potential rebound.
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