Bybit x Block Scholes Crypto Derivatives Analytics Report (Dec 18, 2025): No Signs of Impending Santa Rally

Despite the Fed delivering their third consecutive cut to interest rates as was widely expected on Dec 10, 2025, and subsequent labor market data showing that US unemployment had ticked up to its highest level since September 2021 at 4.6%, sentiment in crypto remains at extreme lows. BTC and ETH remain 30% and 40% below their 2025 high water marks, and seem unable to sustain any meaningful recovery rally for longer than 24 hours. 

As a result, participation levels in derivatives markets remain low, with subdued levels of trade volumes and a drop in volatility expectations. What positioning does remain is bearish, with a skew of volatility smiles towards puts suggesting strong demand for put options at expiries well into the new year.

• Perpetuals: BTC funding rates remain positive, painting a contrast to almost all other measures of sentiment. Altcoin rates are as changeable as their daily returns.

• Options: While short-tenor options do not imply the same extreme levels of volatility as they did during the height of the crash, volatility expectations remain at high levels with a steepened term structure. Put options are especially in demand at all tenors, suggesting a demand for protection against a worsening sell-off is higher than demand for exposure to any potential “Santa Rally”.