Crypto Markets Regain Footing After Selloff, But Traders Still Hedge Cautiously: Bybit Report

With BTC above $93K and ETH past $3K, reduced downside fear and BAT’s breakout rally suggest improving sentiment, but macro caution prevails.

Global crypto markets are showing early signs of a rebound after a sharp selloff earlier this month, according to the latest Crypto Derivatives Analytics Report by Bybit, the world’s second-largest crypto exchange by trading volume, in partnership with derivatives analytics firm Block Scholes.
While Bitcoin crossed the $93,000 mark and Ethereum reclaimed the $3,000 psychological level, traders continue to approach the recovery with caution. The sharp correction on December 1, triggered by hawkish tones from the Bank of Japan, shook investor sentiment just as optimism had begun returning to the markets. Despite positive developments such as Vanguard opening its platform for crypto ETF and mutual fund trading, derivatives data indicates that traders are still operating defensively.

Han Tan, Chief Market Analyst at Bybit Learn, noted that “cryptocurrencies have been buffeted by multiple crosswinds, from shifting expectations surrounding major central bank policies, to mounting concerns over the viability of DATs. Major crypto prices are likely to remain beholden to macro forces over the immediate term, especially with the pivotal Fed rate decision looming, even as the crypto world attempts to shake off the ghosts of the October 10 liquidation event.”
The report identifies several signals that reflect improving, yet tentative, market sentiment. Notably, options traders have significantly reduced their bearish positioning. Put-call skew premiums, a key measure of downside protection demand, fell from 10 to 13 percentage points earlier this month to just 2 to 4 percentage points. This shift implies that traders are now pricing crash protection with much lower premiums than just a week ago.

Meanwhile, leverage activity remains muted. Open interest in perpetual futures has risen modestly alongside the rebound, but continues to lag behind levels seen before the October 10 crash. The absence of liquidation cascades during recent selloffs signals a healthier risk environment, suggesting that the market is no longer overly leveraged.
Block Scholes’ proprietary Risk Appetite Index reflects this nuanced stance. Although sentiment has tilted more positive, the index indicates that traders have not turned decisively bullish. This aligns with the reality that major assets like Bitcoin and Ethereum still trade far below their all-time highs. The index measures euphoria above one and panic below minus one, with directional movement correlating closely to actual spot returns.

One standout from the report is the Basic Attention Token (BAT), which has surged over 100 percent since October 11 to approximately $0.27. BAT, which fuels the Brave browser’s privacy-focused advertising model, has significantly outperformed broader altcoin peers and contributed to social tokens becoming the second-best performing sector over the past month, just behind privacy coins.
The latest findings suggest that while the worst of the recent volatility may be over, cautious optimism rather than euphoria is guiding market behavior. As the industry watches key macroeconomic signals including the upcoming U.S. Federal Reserve decision, sentiment will likely remain data-driven and reactive.
For a more comprehensive breakdown of these market dynamics, the full Bybit x Block Scholes report is available for download.

At Prittle Prattle News, we honor your dedication and inventiveness led by showcasing you in a positive light. Under the direction of Editor-in-Chief Smruti Bhalerao, our platform is committed to disseminating powerful narratives that raise awareness and motivate change. For more important stories, follow us on LinkedIn, Instagram, and YouTub