Bitcoin’s recent rally hit a hard wall this week, tumbling from about $105,000 to under $82,000 and wiping out the year’s gains, according to a new Bybit x Block Scholes Crypto Derivatives Analytics Report . The joint study reads like a snapshot of a market that suddenly prefers caution: traders buying short-dated downside protection, volatility popping at the front of the curve, and a general move toward risk-aversion.
The derivatives picture is telling. Implied volatility for both BTC and ETH has climbed past the highs seen after Oct. 10, 2025, leverage unwind, and options now show a clearly inverted term structure. Meanwhile, perpetual futures open interest has been stubbornly flat, sitting around $9 billion for the past week, which suggests traders aren’t rushing to rebuild leverage after October’s shakeout.
Block Scholes’ Risk Appetite Index, which tracks how euphoric or panicked spot-market players are, lined up closely with the price moves, showing that sentiment swings have been a major driver of the recent action. In short, dealers are buying protection for the near term rather than taking big, long-dated bets.
Macro headlines helped push things along. The selloff accelerated after the U.S. September jobs data surprised to the upside and when officials confirmed there would be no October employment report. That combination, the report says, clouds the Fed’s economic visibility and feeds into greater market caution, exactly the kind of backdrop that makes traders favor hedges over high-risk positions.
Retail and ETF Flows Felt the Pain
Bybit and Block Scholes estimate the average ETF investor’s entry was about $89,000, which means the slide pushed a typical ETF holder underwater. For investors who bought in during the run-up, the speed of the reversal has been especially harsh.
Despite the selling in spot markets, the lack of a big rebound in perpetuals’ open interest hints at a more measured professional response. Traders appear reluctant to re-leverage aggressively, treating the current move as one to hedge against rather than to chase.
Bybit , launched in 2018 and now serving more than 70 million users, says the Bybit x Block Scholes report aims to give a clear read on how derivatives markets are reacting as crypto navigates higher uncertainty. The full analysis, which digs deeper into perpetuals, options, and the Risk Appetite Index, is available in the complete Bybit x Block Scholes Crypto Derivatives Analytics Report.
