Crypto Market

BTC and ETH Market Insight

Bitcoin failed to consolidate at $75K and breached support after several attempts. It is now consolidating around $69K after probing mid-week lows near $60K, marking a 52.45% retracement from the October all-time highs amid a liquidity vacuum and panic selling. A ~20% decline from weekly open levels makes this one of the most volatile weeks for Bitcoin since institutional investors entered the crypto space. However, it also set the stage for a strong rebound—currently sitting around $70K as the wave of panic was halted by rigid buying interest at the $60K level.

The drastic drop wasn’t caused by a single catastrophe like the FTX collapse, but rather by a convergence of pressures that amplified each other in a thin-liquidity environment, creating a downward spiral. High leverage across futures, options, and perpetuals markets fueled a feedback loop: when precious metals faced a sharp pullback followed by profit-taking, initial selling triggered automatic position closures, flooding the market with supply just as demand dried up and accelerating the decline further.

There were also rumors of a Korean exchange (Bithumb) accidentally crediting users with massive Bitcoin amounts, reportedly equivalent to around $44 billion in total value, which sparked immediate sell-offs on the platform and contributed to broader pressure. On top of that, Bitcoin miners are grappling with higher operational costs and reduced rewards in the post-halving cycle, forcing many to sell holdings to cover expenses and adding steady supply to an already weak-demand market.

Despite the volatility, Bitcoin has a long history of 30–50%+ corrections—even during major uptrends before reaching new highs. Periods like this often create perfect capitulation territory: leverage gets flushed out to neutral levels, weak hands exit, and the setup strengthens for the next bullish push. The market remains dynamic and fragile, investors should closely monitor policy clarity and avoid high-leverage risks in the near term.

Upcoming Macro Calendar - Source: Trading Economics

Options Market

Over the past week, BTC and ETH options markets plunged into panic amid a brutal selloff with heavy put flows signaling intense downside hedging as prices cratered—BTC briefly hit  $60k and ETH under $1.75k. IV surged sharply alongside RV during the multi-asset rout, with BTC short-term ATM exceeding 110% and major terms over 50%, while ETH hit 120%+ short-term and 70% majors—the highest levels in over a year, reflecting renewed fear. Skew deepened bearishly with extreme put premiums, including one-week 25-delta risk reversals at 26.84% for BTC and 14.8% for ETH as of writing. Transaction volumes stayed elevated, dominated by put blocks and deep-ITM puts for urgent hedging. ETF outflows moderated slightly for BTC (net 4k BTC) but persisted for ETH (net 185k ETH) over the week, driven by redemptions from BlackRock and Fidelity amid rotations to metals and risk-off sentiment. Consider long protective put spreads or put ratio spreads for near-term defense, or build long-term call spreads to capitalize on potential market recovery, as fundamentals remain unshaken.

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Macro

The major benchmarks finished a volatile week with mixed results: the DJIA rose +2.5%, the S&P 500 shed 0.1%, and the Nasdaq lost 1.8%. The Chinese stock market finished the week lower with the increasing uncertainty of geopolitical tensions: the Shanghai Composite Index fell 1.27%, the CSI 300 lost 1.33% and the Hang Seng index dropped 3.02%.