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After an early scare at the start of the month, crypto asset spot prices have enjoyed a modest recovery rally that’s seen BTC reach a two-week high above $94K and ETH reclaim the psychological $3,000 mark.
To recap, during early Asian trading hours on Dec 1, 2025, BTC led other risk-on assets and sold off sharply amidst hawkish signs from the Bank of Japan and a spike in JGB bond yields, foreshadowing the move in US equities when trading in New York began. However, recent bullish developments (including Vanguard opening its platform up for trading crypto ETFs and mutual funds) have encouraged a sharp recovery rally. As such, sentiment in derivatives markets, particularly in options markets has picked up.
Open interest in perpetual futures positions has increased slightly, though remains far below pre-Oct 10, 2025 levels, and volatility smiles for BTC and ETH have priced out the most extreme part of their bearish premium towards ‘crash protection’. Still, the recovery has not been enough to turn options traders bullish just yet – unsurprising given how far both BTC and ETH trade relative to their all-time high levels.
Perpetuals: Open interest is still very subdued relative to Oct 10's liquidation event which was nearly two months ago, while funding rates showcase altcoin weakness.