Bitcoin rebounds off $86,000 as downtrend persists; risk-off sentiment lifts gold and silver
Bitcoin (BTC $87,754) recovered after dipping to $86,000 on Sunday, its lowest level in over a month, coinciding with the reopening of CME futures at 23:00 UTC. The cryptocurrency rose more than 2% in the following nine hours before losing momentum near $88,250.
Despite the bounce, bitcoin remains in a prolonged downtrend marked by a series of lower highs and lower lows since October, hinting at early signs of a bear-market correction. Sunday’s pullback was fueled by risk-off sentiment after a turbulent week, including speeches from U.S. President Donald Trump in Davos on Greenland, tariffs, and geopolitical tensions.
That sentiment lifted precious metals to record highs, reinforcing bitcoin’s profile as a risk asset rather than a haven, moving largely in line with U.S. equities.
Derivatives positioning
BTC futures open interest held steady at $22.6 billion despite the price drop, signaling a pause in deleveraging. Funding rates were largely neutral around 5% annualized, though OKX diverged with -3.8%, indicating localized bearish bets. Meanwhile, the three-month annualized basis on Binance and Deribit edged above 5%, suggesting renewed institutional interest amid consolidation.
Options markets showed high conviction, with a 15% one-week 25-delta skew and 58% of 24-hour volume in calls. The implied volatility term structure shifted from contango to backwardation, with near-term rates higher than longer-dated contracts. Front-end volatility spiked to 41.5%, up from ~39% mid-curve, climbing toward 47% for late 2026, highlighting a premium for near-term positioning while maintaining a bullish long-term outlook.
Coinglass reported $744 million in 24-hour liquidations, dominated by ETH ($273M), BTC ($207M), and SOL ($63M). Binance’s liquidation heatmap flagged $88,370 as a critical level to watch in case of further downside.
Altcoin performance
While bitcoin showed weakness, altcoins demonstrated resilience. Ether (ETH $2,929) and XRP ($1.89) both rose 2.8% overnight, while privacy coins Zcash (ZEC $381) and Monero (XMR $467) gained 6% and 3%, respectively.
Metaverse tokens led gains, with Axie Infinity (AXS) up more than 23% and the CoinDesk Metaverse Select Index (MTVS) rising 6.9%, contributing to a year-to-date rally of 34.4%. The CoinDesk 20 (CD20) Index has fallen 0.52% since January 1, while the altcoin-heavy CoinDesk 80 (CD80) is up 2.5%, reflecting altcoin strength.
RIVER, the token of its namesake stablecoin protocol, surged more than 2,100% over the past 30 days, including a 34% jump in the past 24 hours. The “altcoin season” indicator stands at 28/100, above last month’s 16/100 but still well below September’s peak of 76/100.
Since October’s $19 billion liquidation cascade, low liquidity and thin order books have amplified altcoin moves in both directions, contributing to dramatic swings and high liquidation events during selloffs like Sunday’s.
