Bybit and Block Scholes Report Highlights Diverging Signals in Bitcoin Derivatives Markets

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27 Feb, 2026, 14:50 IST

DUBAI, UAE, Feb. 27, 2026 /PRNewswire/ -- Bybit, the world's second-largest cryptocurrency exchange by trading volume, has released the latest Bybit x Block Scholes Crypto Derivatives Analytics report, analyzing recent volatility, positioning, and sentiment across Bitcoin and Ethereum derivatives markets.

The report details how Bitcoin broke out of a prolonged low-volatility range after briefly falling to $62,000, followed by a sharp rebound toward the $68,000 level. While spot prices have recovered much of the decline, derivatives markets continue to signal caution.

Key findings:

Bitcoin's realized volatility rose sharply after weeks of consolidation.
Options markets aggressively priced downside risk during the sell-off but did not reprice higher on the rebound.
One-week at-the-money implied volatility climbed to about 60%, leaving the front end of the volatility curve mildly inverted.
Put skew eased from extreme levels but remains biased toward downside protection.
Perpetual futures open interest has continued to decline, indicating limited appetite for leveraged exposure.

"The $70,000 psychological level has thwarted Bitcoin bulls for much of this month, keeping the world's oldest and largest cryptocurrency on course for its fifth consecutive monthly decline," said Han Tan, Chief market analyst at Bybit Learn. "Still, as crypto's fundamentals remain supportive, the current confidence crisis may ultimately create space for a strong bullish narrative to emerge. Flows could reverse once macro clarity improves, particularly around Federal Reserve policy or U.S. trade policy."

The report shows that despite the rebound in spot prices, derivatives markets remain defensively positioned. Short-dated options continue to reflect demand for protection against renewed downside, and volatility levels during the recovery remain notably lower than those seen at the height of the sell-off.

Broader indicators reinforce the cautious outlook. Spot Bitcoin ETFs have recorded net outflows for four consecutive months, placing Bitcoin on track for its fifth straight monthly decline, a pattern last observed during the bear market following the 2018 ICO cycle. Ethereum shows a similar setup, with spot Ether ETFs nearing a fourth month of net outflows since their launch in July 2024. Weak retail sentiment and declining leverage further underscore the lack of conviction behind the recent price recovery.

The full Bybit x Block Scholes report is available for download.

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About Bybit

Bybit is the world's second-largest cryptocurrency exchange by trading volume, serving a global community of over 80 million users. Founded in 2018, Bybit is redefining openness in the decentralized world by creating a simpler, open and equal ecosystem for everyone. With a strong focus on Web3, Bybit partners strategically with leading blockchain protocols to provide robust infrastructure and drive on-chain innovation. Renowned for its secure custody, diverse marketplaces, intuitive user experience, and advanced blockchain tools, Bybit bridges the gap between TradFi and DeFi, empowering builders, creators, and enthusiasts to unlock the full potential of Web3. Discover the future of decentralized finance at Bybit.com.

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