According to the latest report released January 27, Bitcoin’s derivatives market has experienced a significant structural transformation, as options open interest has now exceeded perpetual futures for the first time after the mass liquidation event in October. The shift signifies a pivotal transformation in the manner traders are articulating their risk exposure. Systematic leverage across crypto markets has decreased to approximately 3% of total market capitalization (excluding stablecoins), a significant decline from the leverage-intensive environment that characterized 2024 and early 2025. Instead of a complete exodus, capital shifted into protective options structures. BTC dominance held steady around 59% during Q4, despite mid- and small-cap tokens struggling to maintain their previous gains. The report highlights that supply dynamics indicate distribution trends—BTC supply active within three months surged to 37% in Q4, while long-dormant coins experienced slight movement.
Sentiment-wise, the Net Unrealized Profit/Loss indicator transitioned from “Belief” to “Anxiety” throughout October and has yet to bounce back. Historical patterns indicate that these phases of anxiety generally align with consolidation rather than capitulation. Bitcoin is currently priced at $87,762, but recent data indicates that the platform’s premium has dipped into negative territory, suggesting a decline in domestic demand. One of the most notable observations: traditional cycle frameworks are increasingly proving to be less effective for ETH. The report contends that structural changes—such as fee compression on Layer 2s and evolving network economics—have weakened the effectiveness of cycle-based analysis. “Market outcomes are now more likely to be influenced by broader liquidity conditions and relative positioning rather than solely by cycle duration,” the analysts stated.
Survey data indicates a sustained preference for large-cap exposure in the face of geopolitical uncertainty. The report characterizes sentiment as “selectively constructive”—institutions are not bearish, yet they are not pursuing aggressively either. This defensive stance is consistent with the options market data. When sophisticated players transition from leverage to defined-risk strategies, it often indicates expectations of turbulent conditions rather than strong directional conviction. The refined market structure following deleveraging sets the stage for more sustainable movements when catalysts arise.
Reduced leverage results in diminished liquidation cascades. Traders have already invested in their downside protection through options-heavy positioning. Key dates to monitor: any macro events that might alter the prevailing “Anxiety” sentiment regime. The report indicates that volatility compression or stable macro conditions might serve as a catalyst for an uptick in sentiment—however, the specific catalysts remain unclear as we approach February.