Bitcoin extended recent losses as derivatives data pointed to a decisive shift toward risk-off positioning across crypto markets.
Digital assets opened the week under pressure following a volatile weekend, with bitcoin hovering below the $70,000 level as it struggled to regain momentum after last week’s sharp selloff. While BTC fell more than 2.8% over the past 24 hours, it remains well above its recent lows near $60,000, leaving traders divided over whether the market is entering a deeper bear phase or nearing a cyclical bottom.
Some bitcoin bulls cited the slowing pace of declines as a sign of downside exhaustion, even as skeptics pointed to the failed rebound as confirmation of broader weakness. Attention has also turned to software and technology stocks, where early signs of stabilization have emerged as fears of a sharper equity drawdown begin to ease.
The CoinDesk 5 Index (CD5) fell 3.4%, with all five major cryptocurrencies posting losses. Ether dropped roughly 5%, underperforming bitcoin as traders reduced exposure to riskier assets, though prices held above the key psychological level of $2,000. The broader CoinDesk 20 (CD20) index declined 3.7%.
Derivatives positioning signals caution
Futures and options markets reflected a clear defensive turn. Bitcoin futures open interest fell from about $19 billion to $16 billion over the past week, indicating sustained deleveraging. Funding rates on major exchanges flipped neutral to negative, with Bybit at -2.24% and Binance at -0.5%, suggesting short sellers are increasingly in control.
The three-month futures basis has compressed to around 3%, pointing to cooling institutional demand. Options data reinforced the risk-off tone, with the one-week 25-delta skew rising to 20% and call dominance slipping to 48%, signaling increased demand for downside protection.
Implied volatility has moved into extreme backwardation, with near-term volatility surging to about 85% compared with longer-dated expectations near 50%, reflecting a sharp premium for immediate downside hedging.
Liquidations also picked up. Coinglass data showed roughly $397 million in positions wiped out over the past 24 hours, split roughly evenly between longs and shorts. Bitcoin accounted for $234 million in liquidations, followed by ether at $74 million and solana at $14 million. Binance liquidation data points to $68,160 as a key level to watch if prices fall further.
Token launch stumbles
Elsewhere, crypto wallet Rainbow’s newly launched RNBW token struggled out of the gate. The Ethereum-based project debuted the token on Coinbase’s Base layer-2 network last week, but prices quickly fell to $0.025 — a 75% drop from the $0.10 ICO price set just two months earlier. The token has since rebounded modestly to around $0.031.
The selloff dashed expectations among traders betting on a $100 million fully diluted valuation. On Polymarket, odds for that outcome had climbed to nearly 80% earlier this year. The token’s FDV is now closer to $31 million.
Much of the backlash stemmed from delays in token distribution to early buyers and users participating in Rainbow’s onchain rewards program. Some users reported not receiving their airdropped tokens hours after the launch.
Rainbow co-founder Mike Demarais attributed the issues to backend infrastructure struggling under heavy demand. Under the project’s vesting terms, U.S.-based investors will not gain full access to their tokens until December 2026.
Rainbow raised $18 million in a 2022 Series A round led by Reddit co-founder Alexis Ohanian’s firm, Seven Seven Six. The wallet is known for its gamified features and points-based system tied to the RNBW token.
