This report is for professional investors and information purposes only. Persons without professional investment experience should not rely on it. Not investment advice or a personal recommendation. Cryptoassets are high risk and volatile and you may lose all capital invested. See full risk information at the end of this document.
- Performance: Cryptoassets remained volatile last week as the AI trade came under renewed pressure from slowing revenue growth at lofty valuations amid tightening financial conditions, with the upside surprise in US inflation lifting the odds of another Fed rate hike by year-end to around 90%. That said, bitcoin’s relative resilience versus other major risk assets suggests investors may already be anticipating a monetary policy pivot as the equity correction deepens - a development that the recent decline in long-term bond yields appears to corroborate. Until a decisive policy pivot arrives, however, broader financial market volatility is likely to spill over into bitcoin and other major cryptoassets, and downside risks remain elevated.
- Cryptoasset Sentiment Index: Our inhouse Cryptoasset Sentiment Index has oscillated around neutral levels last week and currently signals a slightly bearish market sentiment.
- Chart-of-the-Week: Bitcoin has held up remarkably well against other major risk assets during the ongoing correction in US equities, suggesting investors may already be anticipating a renewed easing in financial conditions at the margin - consistent with our long-held thesis of Bitcoin as a “canary in the macro coal mine” that tends to anticipate shifts in financial conditions earlier than other major financial assets.
Chart of the Week
Performance indexed to 30/09/2026 00:00:00 UTC
Performance
Cryptoassets continued to be volatile last week amid continued downside pressure on the AI trade. It is worth reiterating that the AI complex faces a “perfect storm” from decelerating revenue growth at lofty valuations amid tightening financial conditions as highlighted in our latest Bitcoin Macro Investor report.
The S-1 leak by Reuters revealed that major AI labs continue to be unprofitable while revenue growth will most likely slow down significantly due to a slowdown in capex spending growth among major hyperscalers.
The upside surprise in US inflation last week has led to a renewed repricing in Fed rate hike odds as well. At the time of writing the report on Monday morning, Fed Funds Futures price a 90% probability of another Fed rate hike until year-end 2026.
Meanwhile, elevated geopolitical risks do not signal an imminent relief on the commodity inflation side either as the Strait of Hormuz continues to be effectively closed with low single-digit daily tanker crossings. High-frequency inflation data also suggest that US inflation will likely accelerate in the short term.
All in all, this will continue to exert macroeconomic pressure on the AI trade which also faces industry-specific headwinds such as token price deflation due to Chinese LLM competition at the same time.
That said, in our view, a deeper correction in the US stock market also raises the odds of a monetary policy pivot as well which may explain bitcoin’s resilience against other major risk assets (Chart-of-the-week).
One of our long-held theses for Bitcoin continues to be that of a “canary in the macro coal mine” that may anticipate changes in financial conditions earlier than other major financial assets. Bitcoin’s resilience may already signal that investors are starting to anticipate a renewed easing in financial conditions at the margin.
In fact, any repricing in global growth expectations amid the sell-off in the stock market will likely lead to a repricing in monetary policy expectations, which will most likely be reflected in falling (real) bond yields first.
The fact that long-term bond yields have started to decline from previous multi-decade highs may already be the first evidence of such a development. However, we think broader financial market volatility will most likely cause volatility in Bitcoin and other major cryptoassets as well. Until a decisive policy pivot arrives, downside risks still remain elevated.
Bottom Line: Cryptoassets remained volatile last week as the AI trade came under renewed pressure from slowing revenue growth at lofty valuations amid tightening financial conditions, with the upside surprise in US inflation lifting the odds of another Fed rate hike by year-end to around 90%. That said, bitcoin’s relative resilience versus other major risk assets suggests investors may already be anticipating a monetary policy pivot as the equity correction deepens - a development that the recent decline in long-term bond yields appears to corroborate. Until a decisive policy pivot arrives, however, broader financial market volatility is likely to spill over into bitcoin and other major cryptoassets, and downside risks remain elevated.
Sentiment
Our in-house “Cryptoasset Sentiment Index” [1] improved slightly but remained in negative territory for the whole week.
At the moment, 5 out of 15 indicators remain above their short-term trend.
The most notable changes were BTC’s Funding Rate flipping from negative to positive, whilst BTC’s 1M Implied Vol and BTC’s Futures Long Liquidation Dominance flipped from positive to negative. Together, this suggests that futures traders and option traders have different outlooks and views for the asset, albeit over different time horizons. Futures trader’s speculative fervour increased as short liquidations dominated, whilst options traders have a slightly more apathetic longer-term view.
The Crypto Fear & Greed Index increased slightly over the past week, transitioning from the “Neutral” zone to the “Greed” zone.
Performance dispersion increased slightly suggesting some pockets of relative strength were evident amongst the down draft. Layer 1s declined the least, with Zcash and Monero outperforming Bitcoin. Whilst Gaming tokens declined the most. Respectively, these subsectors returned between -8% and -17% week over week.
Altcoin outperformance vis-à-vis Bitcoin decreased slightly to 10% of the altcoins tracked in our index. This is inline with increasing performance dispersion as the pocket of strength was idiosyncratic versus a broader beta drawdown.
Sentiment in traditional financial markets as measured by our in-house measure of Cross Asset Risk Appetite (CARA) has decreased from 0.09 to -0.07 over the past week, signalling risk appetite has decreased and turned negative within TradFi as the macro backdrop worsens for riskier assets. This has likely had a negative knock-on effect on Crypto as well.
The CME Bitcoin Commercials Net Positioning metric captures the difference between long and short CME Bitcoin futures contracts. The reading has decreased from –13.85% to –13.01% of open interest, suggesting traders have slightly decreased their short leverage, although the outlook remains broadly the same, with preference to hedge against a potential decline in prices.
Bottom Line: The broader downturn was likely led by a reduction in Cross Asset Risk Appetite, with the indicator slipping into negative territory. The Cryptoasset Sentiment Index also stayed negative throughout the week, despite recovering from -0.49 to -0.21. Depressed sentiment likely filtered through to Alt Coins that continue to struggle relative to Bitcoin, with only 10% of our tracked index outperforming. Layer 1s, including Bitcoin, outperformed other major subsectors led by Zcash and Monero, albeit still broadly declined; whilst Gaming tokens underperformed. Bitcoin’s Net positioning is still skewed to hedge further downside risk.
Fund Flows
Global crypto ETPs experienced around -645.3 mn USD in net outflows last week, across all types of cryptoassets, after -1,274.1 mn USD in net outflows the previous week.
Global Bitcoin ETPs experienced net outflows of -225.9 mn USD last week, of which -235.2 mn USD in net outflows were related to US spot Bitcoin ETFs.
The Bitwise Bitcoin ETF (BITB) in the US experienced net inflows of +2.2 mn USD last week.
In Europe, the Bitwise Physical Bitcoin ETP (BTCE) experienced net inflows equivalent to +2.2 mn USD, as the Bitwise Core Bitcoin ETP (BTC1) experienced net inflows of around +4.3 mn USD.
The Grayscale Bitcoin Trust (GBTC) posted no net inflows or outflows, whereas the iShares Bitcoin Trust (IBIT) experienced net outflows of around -165.5 mn USD last week.
Meanwhile, global Ethereum ETPs experienced -356.5 mn USD in net outflows last week, of which US spot Ethereum ETFs recorded net outflows of around -320 mn USD on aggregate.
The Grayscale Ethereum Trust (ETHE) posted net outflows of -18.3 mn USD, whilst the iShares Ethereum Trust (ETHA) saw net outflows of -299 mn USD.
The Bitwise Ethereum ETF (ETHW) in the US experienced no net inflows or outflows last week.
In Europe, the Bitwise Physical Ethereum ETP (ZETH) recorded net inflows of +0.8 mn USD, whilst the Bitwise Ethereum Staking ETP (ET32) saw net outflows of -7.6 mn USD.
Altcoin ETPs ex Ethereum also saw net outflows of -60.2 mn USD last week.
Thematic & basket crypto ETPs posted net outflows of -2.7 mn USD on aggregate last week. The Bitwise MSCI Digital Assets Select 20 ETP (DA20) recorded no net inflows or outflows last week.
Bottom Line: Global crypto ETPs recorded a third consecutive week of net outflows, although the pace roughly halved from the previous week and Ethereum overtook Bitcoin as the main source of redemptions. Outflows were concentrated in BlackRock's iShares products, with ETHA alone accounting for around 93% of US spot Ethereum ETF outflows and IBIT for around 70% on the Bitcoin side.
On-Chain Data
Bitcoin has continued to struggle around the $83k region, with several attempts to reclaim the level failing to establish a sustained break higher. This remains an important decision point for the market, representing a confluence between the average ETF cost basis and the prior technical higher-high threshold. At the same time, weakness has generally proved short-lived, with drawdowns met by relatively aggressive buying and price recovering quickly from local lows. Underlying demand therefore remains responsive, although a sustained move above $83k is still needed to establish the area more convincingly as support.
The distribution of investor profitability helps explain why this region has become so important. The levels where 50%, 40% and 30% of invested capital would sit in profit are currently around $84k, $79k and $73k respectively. The 50% threshold sits almost directly alongside the average ETF cost basis and prior technical higher-high, placing Bitcoin close to the point where roughly half of invested capital is held in profit and half at a loss. A sustained move above this area would push the majority of invested capital back into profit and represent an important step beyond the market’s current midpoint.
The same framework also provides a useful guide to the downside. The True Market Mean near $78k, Short-Term Holder cost basis around $74k and 200-day moving average near $72k closely overlap with the 40% and 30% profitability thresholds, creating a broader structural zone between roughly $72k and $78k. Bitcoin remains above this area, meaning a pullback towards it would not necessarily undermine the broader constructive structure. A successful defence would instead suggest that the market is continuing to build support above the levels that defined the earlier transition out of the bear market.
The Accumulation Trend Score is consistent with this balanced picture. At around 0.48, the metric has returned close to its neutral 0.5 level, suggesting that accumulation and distribution intensity are now broadly matched. Neither side is exerting a clear dominant influence, which fits with Bitcoin trading close to the midpoint of investor profitability and struggling to establish a decisive move in either direction.
Investor spending behaviour remains more encouraging. The Spent Output Profit Ratio (SOPR), which measures the average profit or loss realised per coin spent, remains above 1 across the wider market, Short-Term Holders and Long-Term Holders. This indicates that all major cohorts continue to realise coins in profit on average. Importantly, both aggregate SOPR and Short-Term Holder SOPR have recently retraced towards the break-even level of 1 and held, suggesting that weakness is being absorbed around investor cost basis. Investors therefore appear more willing to defend their acquisition prices than use rallies simply as opportunities to exit, a pattern historically more characteristic of risk-on conditions.
Risk appetite nevertheless remains uneven across the crypto market. Over the past seven days, large caps declined around 2.8%, compared with 5.0% for mid caps and 5.7% for small caps. The small-cap decline ranks in roughly the 86th percentile for weekly decline severity over the past year, while mid caps sit around the 78th percentile and large caps around the 71st percentile. The broader altcoin market has fallen roughly 4.0%, also around the 78th percentile, compared with a decline of only around 1.8% for Bitcoin, closer to the 62nd percentile. Recent weakness has therefore been disproportionately concentrated further out along the crypto risk curve.
Importantly, this deterioration is not simply a function of altcoins carrying a higher beta to Bitcoin. Using daily log returns, the 90-day beta of altcoin market capitalisation to Bitcoin currently stands at around 0.82, placing it in roughly the 41st percentile of the past three years. Despite this relatively moderate sensitivity over the broader window, altcoins have materially underperformed Bitcoin over the past week. This suggests that the recent weakness reflects a deterioration in relative demand further out along the crypto risk curve, rather than merely an amplified response to Bitcoin’s own decline.
On balance, the market appears to be sitting close to equilibrium. Bitcoin is trading around the point where roughly half of invested capital is in profit, accumulation and distribution intensity are broadly balanced, and several independent pricing frameworks converge around the same structural levels. At the same time, spending behaviour remains constructive and weakness continues to attract buyers. The key hurdle is now the $83k-$84k region. A sustained break above this area would move the majority of invested capital back into profit and provide stronger evidence that the market is progressing from an early bull-market transition into the next phase of expansion.
Futures, Options & Perpetuals
Perpetual futures positioning rebuilt more clearly over the past week, with BTC open interest increasing by around 10.5k BTC, or 2.5%, to roughly 429.9k BTC. This represents a more meaningful expansion than the modest increase observed previously, although positioning remains well below the more aggressive leverage build-ups seen earlier in the cycle. Perpetual exposure has therefore increased, but does not yet appear stretched.
The increase has been concentrated primarily in crypto-native perpetual markets rather than CME. CME futures open interest was effectively unchanged, rising by only around 330 BTC, while the three-month rolling futures basis moved modestly higher to approximately 5.1% from 4.8%. With little change in CME open interest, there is limited evidence of a meaningful increase in institutionally oriented futures exposure over the week.
Liquidation activity remained elevated. Combined long and short liquidations reached approximately $3.0bn, up from around $2.5bn previously. Despite this, perpetual open interest still ended the week higher, suggesting that positioning was rebuilt following the forced deleveraging rather than remaining depressed. Leverage has therefore returned selectively, rather than through a broad-based expansion in risk.
Funding rates also moved modestly higher alongside the increase in open interest. On a seven-day moving average, annualised perpetual funding ended the week at approximately 3.0%, up from 2.4%. Funding therefore retains a positive long bias, but remains comparatively subdued. Taken together, firmer funding and higher perpetual open interest point to some rebuilding in leveraged long positioning, although conditions remain relatively contained.
Options positioning has continued to rebuild more meaningfully. BTC options open interest increased by around 19.2k BTC, or 4.3%, to approximately 466.7k BTC, extending the recovery that followed the quarterly expiry reset. The pace of expansion has slowed from the previous week, but options remain the more active part of the derivatives complex.
The composition of that positioning remains defensive. The put-to-call open interest ratio across major crypto-native exchanges edged higher to around 0.60 from 0.59, while the ratio across IBIT options remains elevated near 0.75. The sharp increase in IBIT put positioning seen previously has therefore persisted, leaving the ETF options complex notably more put-heavy than crypto-native venues.
The same defensive bias is visible in 25-delta skew. One-week skew has risen to approximately +0.15, placing it around the 91st percentile of its three-year distribution, while one-, three- and six-month skew sit around the 74th to 75th percentiles. The repricing is therefore not confined to the front end. Positive skew indicates that puts are trading at higher implied volatility than calls, showing that downside protection is carrying a materially greater premium across the curve.
| Tenor | Current Skew | 7-Day Change | 3-Year Percentile |
|---|---|---|---|
| 1w | +0.1477 | +0.0495 | 91st |
| 1m | +0.0948 | +0.0155 | 74th |
| 3m | +0.0699 | +0.0273 | 75th |
| 6m | +0.0476 | +0.0144 | 75th |
At the same time, implied volatility remains historically compressed. One-week IV has risen modestly to around 31.6%, while one-month IV stands near 36.2%, placing them in approximately the 6th and 15th percentiles of their respective three-year distributions. Three- and six-month IV remain even more subdued at around the 2nd percentile and below the 1st percentile respectively. Options markets are therefore still pricing relatively little overall future volatility despite the pronounced premium attached to downside protection.
| Tenor | Last Week | Current | 3-Year Percentile |
|---|---|---|---|
| 1w | 30.8% | 31.6% | 6th |
| 1m | 34.1% | 36.2% | 15th |
| 3m | 37.1% | 36.6% | 2nd |
| 6m | 38.1% | 37.6% | <1st |
The divergence between skew and outright implied volatility is particularly notable. Absolute volatility expectations remain subdued, while the relative price of downside protection has risen sharply. Historically, similarly compressed levels of implied volatility have often preceded a subsequent expansion in realised volatility. The signal remains direction agnostic, but with downside protection becoming increasingly expensive relative to calls, the current setup suggests that the potential for a larger move may be greater than prevailing volatility expectations imply.
Gamma exposure is also comparatively stabilising around current price. Aggregate positioning stands at roughly +$4.7bn net gamma, with approximately +$9.5bn of positive exposure against -$4.8bn of negative exposure. With Bitcoin near $81.4k, sizeable positive concentrations sit around $80k, $83k and $85k, suggesting dealer hedging may act more countercyclically and dampen realised movement around spot.
Further above spot, however, the structure becomes less stabilising. Negative gamma remains concentrated near $88k and particularly $90k, where exposure is approximately -$2.3bn. A decisive move towards this region could therefore make dealer hedging increasingly procyclical, potentially reinforcing price movement as those strikes become more relevant.
On balance, derivatives positioning has rebuilt further, but leverage remains relatively restrained. Perpetual open interest and funding have both increased, although CME positioning is largely unchanged and funding remains modest by historical standards. Options open interest continues to recover, but the composition is increasingly defensive, with elevated put positioning and positive skew showing a clear preference for downside protection. At the same time, implied volatility remains historically compressed across the curve. The derivatives complex is therefore not signalling excessive leverage, but rather a market that remains cautiously positioned for downside risk while still pricing comparatively subdued overall volatility. Aggregate gamma may help contain movement around spot, although negative exposure near $90k could create more reflexive price action if Bitcoin moves decisively higher.
Bottom Line
- Performance: Cryptoassets remained volatile last week as the AI trade came under renewed pressure from slowing revenue growth at lofty valuations amid tightening financial conditions, with the upside surprise in US inflation lifting the odds of another Fed rate hike by year-end to around 90%. That said, bitcoin’s relative resilience versus other major risk assets suggests investors may already be anticipating a monetary policy pivot as the equity correction deepens - a development that the recent decline in long-term bond yields appears to corroborate. Until a decisive policy pivot arrives, however, broader financial market volatility is likely to spill over into bitcoin and other major cryptoassets, and downside risks remain elevated.
- Cryptoasset Sentiment Index: Our inhouse Cryptoasset Sentiment Index has oscillated around neutral levels last week and currently signals a slightly bearish market sentiment.
- Chart-of-the-Week: Bitcoin has held up remarkably well against other major risk assets during the ongoing correction in US equities, suggesting investors may already be anticipating a renewed easing in financial conditions at the margin - consistent with our long-held thesis of Bitcoin as a “canary in the macro coal mine” that tends to anticipate shifts in financial conditions earlier than other major financial assets.
Appendix
Data subject to change
Combined positioning = futures and options in % of Ol
Notes
[1] The Cryptoasset Sentiment Index is a composite indicator consisting of 15 different sub-indicators covering sentiment, on-chain, derivatives, flows developments as well as sentiment in traditional financial markets. A 90-day rolling z-score is used to standardise and aggregate these sub-indicators.
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