- Performance: Crypto markets largely consolidated amid elevated macro uncertainty; bitcoin briefly dipped below $65k after long futures liquidations, while some large caps (e.g., TRON, Bitcoin Cash, BNB) outperformed and about half of tracked altcoins beat bitcoin last week.
- Sentiment: The Cryptoasset Sentiment Index continues to move sideways, indicating neutral to slightly bearish sentiment, with subdued ETP inflows and still-depressed institutional positioning contributing to cautious market dynamics.
- Chart-of-the-week: Rising US economic policy uncertainty - highlighted in the chart-of-the-week - is driving cross-asset volatility and tighter financial conditions, which may delay renewed institutional crypto inflows despite indications of longer-term bitcoin undervaluation.
Chart of the Week
*1M ATM IV of Gold, EURUSD, MOVE, and VIX; **1M ATM IV of Bitcoin options
All vol indices have been indexed to 100 at 01/01/2025
Performance
Last week, crypto markets continued to consolidate amid sluggish flows into cryptoasset ETPs and elevated uncertainty. Early Monday morning trading saw a significant number of long futures liquidations that pushed bitcoin briefly below 65k USD.
Uncertainty continues to dominate the headlines. Rising geopolitical risks around a potential armed conflict between the US and Iran is weighing on global risk appetite as well as increasing AI-disruption risks due to the accelerating (coding) capabilities of major LLMs.
In fact, overall uncertainty has been rising significantly more recently. The US economic policy uncertainty index has risen to the highest level since June 2025 when trade policy uncertainty was still top-of-mind for most investors. In our view, this renewed rise in US economic policy uncertainty is creating elevated cross asset volatility as well (Chart-of-the-week).
The rise in cross asset volatility could also be partially responsible for the marginal tightening in US financial conditions that appears to create jitters in private credit markets already.
More idiosyncratic narratives such as ongoing fears around quantum computing are also continuing to weigh on risk appetite in crypto markets although there appears to be increasing awareness and an action plan to resolve these risks judging by a recent initiative spearheaded by Strategy.
This elevated level of uncertainty may be an obstacle to renewed inflows into cryptoasset ETPs although the latest release of 13F-filings in the US revealed that the investment patterns across different investor types that invest into US bitcoin ETFs have been surprisingly robust among investment advisors as well as sovereign wealth funds.
Notably, Bitcoin is currently trading at levels that are materially below those implied by our internal model based on cumulative global bitcoin ETP flows (approximately 40% on our estimates). While such flow-based relationships have historically exhibited variability and are not determinative of price, the current gap suggests positioning and macro uncertainty may be weighing on spot levels relative to this indicator. As these factors evolve and ETP flows normalize, the relationship could narrow, although the timing and magnitude of any adjustment are uncertain. We highlighted potential lagged demand effects following US wirehouse approvals in our latest Quarterly Review as one factor that could influence flows over time.
Nonetheless, bitcoin may continue to consolidate while uncertainty remains elevated, although price outcomes in either direction remain possible. There is also no clear sign of renewed institutional interest based on the notional value of CME bitcoin futures, which remains somewhat depressed. That being said, depressed net non-commercial futures positioning has at times acted as a contrarian indicator, though this relationship is not consistent and does not preclude further downside.
From our point of view, recoveries in these metrics (Bitcoin ETP flows and CME bitcoin futures open interest) would be indicative of whether institutional interest is returning.
In general, our relative and absolute indicators continue to place bitcoin toward the lower end of its historical and cross-asset valuation ranges, as discussed in our latest Bitcoin Macro Investor report , although downside risks persist, including continued macro uncertainty, potential regulatory headwinds, and fragile market sentiment that could lead to further price deterioration in both the near and medium term.
In general, among the top 10 crypto assets TRON, Bitcoin Cash, and BNB were the relative outperformers.
Overall, altcoin outperformance vis-à-vis bitcoin has declined somewhat last week, with 50% of our tracked altcoins managing to outperform bitcoin on a weekly basis. Ethereum also managed to outperform bitcoin last week.
Sentiment
Our in-house “Cryptoasset Sentiment Index” is currently signalling a negative sentiment that has worsened significantly throughout the week, with most of the decline occurring on Sunday.
At the moment, 7 out of 15 indicators are above their short-term trend.
Last week, only the BTC Hedge Fund Beta, Altseason Index, BTC Exchange Inflows, BTC STH SOPR, BTC Funding Rate, BTC Put-Call Volume, Crypto Fund Flows showed positive momentum.
The Crypto Fear & Greed Index continues to signal an “extreme fear” level of sentiment as of this morning and has continued its downward trajectory, posting its second and third (5/100) lowest readings on record within the past week and a half.
Performance dispersion among cryptoassets declined slightly last week from 0.15 to 0.14. When dispersion is low, it may indicate that the market appears to be driven by a less diverse set of narratives which has historically been associated with periods of decreasing risk appetite.
Altcoin outperformance vis-à-vis Bitcoin decreased significantly last week, with 50% of our tracked altcoins in the index. This is broadly in line with low performance dispersion and "extreme fear” sentiment. Although Ethereum did outperform Bitcoin.
In general, decreasing altcoin outperformance may be a sign of decreasing risk appetite within cryptoasset markets.
Sentiment in traditional financial markets as measured by our in-house measure of Cross Asset Risk Appetite (CARA) increased to 0.27. This divergence in traditional finance (TradFi) sentiment reinforces the view that crypto currently lacks a clear narrative catalyst and sustained momentum.
Fund Flows
Global crypto ETPs saw relatively large total net outflows last week across all Bitcoin, Ethereum, Ex-Ethereum, and basket and thematic products.
Global crypto ETPs saw around –390.8 mn USD in weekly net outflows across all types of cryptoassets, after - 92.5 mn USD in net outflows the previous week.
Global Bitcoin ETPs have experienced net outflows totalling –249.9 mn USD last week, of which –315.9 mn USD in net outflows were related to US spot Bitcoin ETFs.
The Bitwise Bitcoin ETF (BITB) in the US experienced net outflows, totalling –10.3 mn USD last week.
In Europe, the Bitwise Physical Bitcoin ETP (BTCE) experienced net outflows equivalent to –0.3 mn USD, whereas the Bitwise Core Bitcoin ETP (BTC1) experienced net inflows of +3.5 mn USD.
The Grayscale Bitcoin Trust (GBTC) posted net outflows of –8.5 mn USD and the iShares Bitcoin Trust (IBIT) experienced net outflows of around –303.5 mn USD last week.
Meanwhile, global Ethereum ETPs also experienced –98.5 mn USD in net outflows last week, of which US spot Ethereum ETFs recorded net outflows of around –123.4 mn USD on aggregate.
The Grayscale Ethereum Trust (ETHE) posted no net inflows or outflows, alongside the iShares Ethereum Trust (ETHA) that also experienced –102.1 mn USD of net outflows.
The Bitwise Ethereum ETF (ETHW) in the US has posted net outflows of –3.3 mn USD.
In Europe, the Bitwise Physical Ethereum ETP (ZETH) saw minor net outflows of -0.1 mn USD, as the Bitwise Ethereum Staking ETP (ET32) saw +0.2 mn of net inflows.
Altcoin ETPs ex Ethereum experienced net outflows of –15.5 mn USD last week.
Thematic & basket crypto ETPs posted net outflows of -26.9 mn USD on aggregate last week. The Bitwise MSCI Digital Assets Select 20 ETP (DA20) experienced no net inflows last week of +/-0.0 mn USD on aggregate.
Global crypto hedge funds exposure to Bitcoin slightly increased last week. The 20-days rolling beta of global crypto hedge funds' performance to Bitcoin increased from 1.17 to 1.19 suggesting increased exposure in line with higher Cross Asset Risk Appetite, our TradFi sentiment indicator.
On-Chain Data
The Bitcoin market continues to oscillate within the local bounds of $66k–$70k, with price yet to establish directional commitment. This compression is producing a coiling structure of successive lower highs and higher lows, a pattern historically associated with impending volatility expansion. However, given the magnitude of the recent capitulation, any ensuing breakout from this structure may likely represent a local resolution within the broader range rather than the start of a new trend.
Exchange sell pressure declined yet remains elevated over the week, with intraday spot buying minus selling volumes closing near –$1.1bn (vs. –$1.3bn the prior week). Notably, aggregate exchange inflows and outflows have collapsed to $3.9bn, the lowest level observed since the overhang following the Trump-tariff shock. This contraction in activity suggests investor participation remains impaired, with market engagement increasingly reactive to episodic shocks rather than indicative of sustained structural demand.
From a technical perspective, the 14-day RSI reached one of its lowest readings on record during the contraction, with only six trading days registering lower values. Notably, a positive divergence is beginning to emerge between declining price and rising RSI, a configuration that has historically coincided with moderating downside momentum even as price continues to make marginal lows, although this relationship is not consistent and does not preclude further declines. A similar divergence structure is also visible across on-chain valuation metrics, including the 90-day MVRV Z-Score, indicating comparable moderation in downside momentum signals.
Net realised profit/loss continues to revert towards equilibrium as the market acclimatises to the emerging local range. This is also producing a divergence with price, as realised losses are easing despite a modest downward price drift. More broadly, the compression of profit- and loss-taking within this zone suggests local saturation of activity, a condition that has historically preceded periods of range expansion as either boundary is retested and ultimately resolved, although direction remains uncertain.
Despite emerging improvements in momentum, aggregate investor stress remains historically elevated. The value of capital held at a loss is estimated at $846bn (~77% of invested capital), while unrealised losses across underwater supply remain near –$265bn, just shy of the largest overhang observed to date. Such conditions typically produce fragile market structures, where elevated loss overhang may dampen the reliability of divergence signals and increase the risk of failed reversals.
Additionally, digital asset treasury companies (DATs) with Bitcoin-focused balance sheets remain deeply underwater on aggregate holdings. Across the cohort, approximately –$15.8bn in unrealised losses are currently held, with Strategy accounting for the majority at –$5.8bn. Despite this drawdown, Strategy continues to demonstrate balance-sheet conviction, acquiring an additional 2,486 BTC over the week, underscoring its ongoing access to capital and willingness to accumulate through adverse conditions.
The primary range is defined between the Realised Price at $55k and the True Market Mean at $79k, with the $70k region acting as the point of control. Together, these levels describe the lower, midpoint and upper bounds of the prevailing macro trading range.
Beyond the True Market Mean, the Short-Term Holder Cost Basis at $91k marks the next major upside threshold. These levels remain the principal hurdles for the market to overcome in order to transition decisively into a risk-on regime. For now, however, price remains materially below these targets.
Notably, the Realised Price (~$55k) and 200-week moving average (~$58k) continue to define the most probable terminal downside region when assessed against historical precedent. While price can deviate below these levels, such moves would enter statistically anomalous territory, where the probability of mean reversion increases materially.
Overall, across both technical and on-chain perspectives, early divergence structures and tentative improvements in momentum are beginning to emerge. However, market sentiment, and by extension market structure, remains fragile, which may increase the risk of failed divergence signals. For now, $70k remains firm resistance, and the market's behaviour around this level will be an important reference point for assessing local structural repair. The Realised Price and True Market Mean continue to define the lower and upper bounds of the prevailing macro range at $55k–$79k.
Futures, Options & Perpetuals
Over the past week, BTC perpetual futures open interest increased by approximately 8.5k BTC, while CME futures open interest rose by 3.6k BTC, signalling a modest uptick in institutional positioning. In parallel, aggregate futures liquidations across all assets moderated to $1.01bn over the week (down from $2.07bn prior). This suggests a substantial share of excess leverage has been cleared within the current price zone, leaving spot-driven flows as the dominant market driver.
From a positioning perspective, significant open interest clusters are forming around $69k and $71k, with additional build-up near $65k on the downside. These levels align closely with the $66k–$70k local range identified in the on-chain section, reinforcing the convergence of technical, on-chain and derivatives signals in defining current market conditions.
Perpetual funding rates (7-day moving average) have risen week-on-week and remain positive, indicating a marginal but increasing long bias among futures traders. A more constructive signal would be a sustained shift into negative funding, reflecting a deeper leverage reset and reduced long crowding.
In parallel, the BTC 3-month annualised basis remains depressed but has edged higher from 3.0% to 3.4%. Despite this modest uptick, levels remain subdued and are typically associated with risk-averse conditions, reflecting still-muted demand for leveraged long exposure.
Turning to options markets, BTC options open interest declined by approximately –31.9k BTC over the week, bringing total open interest to ~440k BTC. Concurrently, the Deribit put-to-call open interest ratio remained elevated at 0.76, while the equivalent measure across IBIT options held near 0.61. Taken together, these dynamics suggest downside hedging demand remains robust but is beginning to moderate, with both Deribit and IBIT put–call ratios declining week-on-week.
The 25-delta skew has ticked higher across all tenors despite relatively flat price action, indicating renewed demand for downside protection across both short- and medium-dated maturities as the market remains confined within a narrow range. Skew also remains elevated relative to the rest of the cycle, suggesting lingering damage to investor sentiment and continued defensive positioning.
Aggregate put and call premiums, both paid and received, declined to $39.7mn, the lowest level since April 2025. This contraction in options premium flow suggests subdued investor engagement and limited conviction in the prevailing range regime.
Options dealer gamma positioning remains predominantly negative across the $58k–$75k range, closely aligning with the macro range defined in the on-chain section. This implies dealer hedging flows across this zone can amplify directional price moves, increasing local volatility. Notably, pockets of positive gamma are emerging near $70k, further reinforcing this level as a point of control and local stabilising zone for price.
Total Gamma exposure (GEX, 7-day moving average) stands near $3.9bn. While elevated in absolute terms, this remains well below cycle extremes. This indicates that although the negative gamma band spans a wide price range, gamma density across this zone is relatively modest, suggesting volatility amplification risk is broad but diffuse rather than concentrated at discrete strikes.
Bottom Line
- Performance: Crypto markets largely consolidated amid elevated macro uncertainty; bitcoin briefly dipped below $65k after long futures liquidations, while some large caps (e.g., TRON, Bitcoin Cash, BNB) outperformed and about half of tracked altcoins beat bitcoin last week.
- Sentiment: The Cryptoasset Sentiment Index continues to move sideways, indicating neutral to slightly bearish sentiment, with subdued ETP inflows and still-depressed institutional positioning contributing to cautious market dynamics.
- Chart-of-the-week: Rising US economic policy uncertainty - highlighted in the chart-of-the-week - is driving cross-asset volatility and tighter financial conditions, which may delay renewed institutional crypto inflows despite indications of longer-term bitcoin undervaluation.
Appendix
Important Information
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Important Analytical Limitations: The observations and analyses presented in this document are based on historical market patterns and data correlations which may not repeat or continue in future market conditions. Past correlations between capital flows and performance metrics are not indicative of future performance and should not be extrapolated as predictive indicators. Material downside risks remain present across all investment timeframes regardless of current undervaluation metrics or favorable technical indicators. All model outputs, fair value calculations, and quantitative assessments are subject to significant uncertainty and methodological limitations, and should not be relied upon as the sole basis for making investment decisions. Investors should conduct independent due diligence and consider multiple factors beyond the scope of this analysis.
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