Bitcoin BTC$87,948.56 recovered after falling to $86,000, its lowest point in more than a month, on Sunday.

The rebound took place alongside the opening of bitcoin futures trading on the CME at 23:00 UTC. The largest cryptocurrency rose more than 2% in the subsequent nine hours before losing strength at $88,250.

Zooming out, bitcoin remains in a grueling downtrend characterized by a series of lower highs and lower lows that started in October to create the etchings of an early bear-market reversal.

Sunday's selloff was spurred by continued risk-off sentiment from investors after a volatile week that saw U.S. President Donald Trump give several speeches in Davos related to Greenland, tariffs and geopolitical conflicts around the world.

That sentiment lifted precious metals gold and silver to record highs, diminishing bitcoin's reputation as a haven asset and cementing it as a risk asset that, for the most part, moves in tandem with U.S. equities.

Derivatives Positioning

By Saksham Diwan

• BTC futures open interest (OI) stabilized at $22.6 billion despite downside price volatility, signaling a pause in recent deleveraging.
• While funding rates have neutralized around 5% annualized across most exchanges, OKX has diverged with a -3.8% rate, reflecting localized hedging or bearish bets.
• In contrast, the 3-month annualized basis on Binance and Deribit edged up to just over 5%, suggesting that while speculative froth has reset, institutional appetite is beginning to firm up during this consolidation.
• BTC options signal high conviction with a 15% one-week 25-delta skew and 58% call dominance in 24-hour volume.
• The implied volatility (IV) term structure has shifted from contango to backwardation, with near-term rates higher than those further out.
• Front-end volatility spiked to 41.53% (Jan. 30) relative to the ~39% mid-curve dip before rising toward 47% in late 2026.
• This structure highlights a significant premium for near-term positioning as the market braces for immediate price action while maintaining a bullish long-term outlook.
• Coinglass data shows $744 million in 24 hour liquidations, with a 77-23 split between longs and shorts. ETH ($273 million), BTC ($207 million) and SOL ($63 million) were the leaders in terms of notional liquidations. The Binance liquidation heatmap indicates $88,370 as a core liquidation level to monitor, in case of a price drop.

Token talk

By Oliver Knight

• As bitcoin continues to show weakness, the altcoin market showed some resiliency overnight.
• Ether ETH$2,907.93 and xrp XRP$1.8906 both rose by 2.8% since midnight UTC while privacy coins zcash ZEC$350.22 and monero XMR$468.17 gained 6% and 3%, respectively.
• The top performing corner of the altcoin market was metaverse tokens, with axie infinity (AXS) rising by more than 23% while the CoinDesk Metaverse Select Index (MTVS) increased by 6.92% since midnight to add to a year-to-date rally of 34.4%.
• The bitcoin-dominant CoinDesk 20 (CD20) Index has now lost 0.52% since the turn of the year while the altcoin heavy CoinDesk 80 (CD80) is in the black having risen by 2.5%, demonstrating relative strength among altcoins.
• RIVER, the native token of its namesake's stablecoin protocol, has been the most prolific altcoin over the 30 days, rising by more than 2,100% after a further 34% move to the upside over the past 24 hours.
• The "altcoin season" indicator is currently at 28/100, still well below September's high of 76/100, but significantly higher than this time last month, when it read 16/100.
• A lack of liquidity and market depth since October's $19 billion liquidation cascade means altcoin moves have been more exaggerated in both directions, leading to a high number of liquidations during selloffs like on Sunday as well as dramatic recoveries as traders navigate thin order books.