Key Points
- Bitcoin remained steady during the recent market downturn, while altcoins experienced liquidations of around $8 to $10 billion.
- A significant increase in volatility was observed in the Ethereum options market, reaching its highest level in over three months.
The crypto market recently experienced a significant uptick in volatility, leading to billions in open interest being wiped out. Bybit and Block Scholes reported that Bitcoin maintained its stability while altcoins suffered the most.
Bitcoin Outperforms Amid Market Volatility
According to a research report, Bitcoin managed to outperform the broader crypto market. Bybit also noted that Bitcoin’s perpetual swaps performed relatively well. On the other hand, the Ethereum options market saw a sharp increase in short-term volatility, exceeding 140%, its highest in over three months.
The liquidations were severe. Bybit CEO Ben Zhou estimated that the actual value of liquidated positions could be around $8 billion to $10 billion. More than $3.1 billion in open interest disappeared following a late-Friday peak across BTC, ETH, XRP, and Solana’s perpetual swaps.
Altcoins Funding Rates Fall
Funding rates mirrored the bearish shift. Altcoins experienced deeper negative funding rates in the days following the crash, while BTC maintained relative stability, according to the report. Open interest levels fell across major tokens, with one notable exception – Bitcoin’s options market. Unlike perpetuals, Bitcoin options did not witness a significant liquidation event. Also, its term structure inversion quickly resolved, as noted by Bybit.
Despite the market upheaval, trading volume surged. Over $31.1 billion in perpetual swaps were traded on February 2, marking the highest daily volume in over a month. For Bitcoin, short-term options volatility eased following an early-week spike, indicating a return to stability, at least temporarily.
