The global cryptocurrency market is gradually stabilizing after a period of intense selling, with Bitcoin striving to consolidate around the $70,000 mark. However, trading positions in derivatives and macro markets indicate that traders remain cautious about future price movements. The Fear & Greed Index also suggests a prevailing sense of "fear" among investors.
According to data from VanEck, Bitcoin's average price over the last 30 days has fallen by approximately 19%. Despite the recent pullback, market conditions have eased, with realized volatility dropping from 80% to 50%. Concurrently, futures funding rates have decreased from 4.1% to 2.7%. Such shifts typically signal that aggressive positions have been cleared, at least in the short term. Over the past 60 days, Bitcoin's price has declined by over 25%, while Ethereum has seen a 33% drop in the same period.
Options Market Signals Caution
The options market, however, is conveying a different narrative. The open interest ratio of put options to call options has risen to 0.77, the highest level recorded since June 2021. Data from VanEck shows that the premium for put options has reached a record high of 4 basis points relative to spot trading volume. This suggests traders are actively seeking protection against downside risks, a common occurrence during periods of heightened uncertainty rather than resolution.
On-chain activity also reflects a cooling trend in the market. On-chain transfer volume has decreased by 31%, and average daily transaction fees have fallen by 27%. Long-term holders have slowed their pace of asset allocation, while miners are inclined to sell only newly mined Bitcoin rather than liquidating reserves on a large scale.
Key takeaways from VanEck's Bitcoin on-chain check:
- The rapidly changing macroeconomic landscape has become a primary source of market pressure. Just weeks ago, the market was discussing the number of potential Federal Reserve rate cuts in 2026; now, the situation has reversed, with traders even anticipating potential rate hikes as early as April.
According to CME FedWatch data, the probability of a rate hike has increased to 12%, up from nearly zero just a week ago. This stands in stark contrast to previous expectations. Furthermore, inflation data has offered little support. February figures showed headline inflation at 2.4% and core inflation at 2.5%, both above target levels, and this was even before the recent surge in oil prices.
Since the escalation of the Iran-Israel conflict, oil prices have surged by approximately 50% in just three weeks. This spike in oil prices directly fuels inflation expectations. Federal Reserve Chair Powell has noted that a "oil shock" is beginning to be reflected in forecasts.
Bitcoin Remains Resilient
The bond market reacted swiftly, with the U.S. 10-year Treasury yield climbing to around 4.38%, up from below 4% in early March. A similar trend has emerged globally, with UK gilt yields surpassing 5% for the first time since 2008.
Amidst all this turmoil, assets that initially benefited from geopolitical shocks are now retracing their gains.