Bybit and Block Scholes report cautious recovery in crypto derivatives after major October liquidation

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Bybit, the world’s second-largest cryptocurrency exchange by trading volume, released its latest Crypto Derivatives Analytics Report, produced in collaboration with Block Scholes, on Tuesday, November 4.

The report gives a comprehensive analysis of crypto derivatives, macroeconomic outlook, and trader sentiment following the $6 billion liquidation on October 10. 

Sources: Bybit, Block Scholes

The liquidation, triggered by renewed U.S.–China trade tensions, prompted widespread deleveraging in perpetual swap markets. Though conditions briefly improved after a subsequent trade deal, any brief optimism was overshadowed by Federal Reserve Chair Jerome Powell’s hawkish remarks during the FOMC press conference. 

With trader sentiment uncertain, Bitcoin (BTC) sank to $107,000 and short-term put-call skews turned negative. 

Derivatives open interest stagnates as volatility persists

According to the report, notional open interest in perpetual contracts remains below $10 billion, showing little sign of recovery since the selloff. Despite record highs in the U.S. equities market, BTC is struggling to break out of the narrow $105,000–$115,000 range. 

Options activity has increased, however, suggesting sustained hedging demand. Rising at-the-money implied volatility and steady interest in short-term puts point to traders maintaining defensive exposure rather than re-leveraging.

WLFI token rebounds but market sentiment mixed

World Liberty Financial (WLF), a decentralized finance (DeFi) platform backed by President Donald Trump and his family, saw its governance token WLFI climb 25% to $0.15 following an 8.4 million WLFI airdrop to early users. However, unstable perpetual funding rates indicate uncertainty remains around the token’s long-term price action.

Sources: Bybit, Block Scholes

Ultimately, the report suggests the derivatives market is slowly finding its footing after a period of heavy deleveraging. 

Still traders remain cautious, holding off on aggressive positioning as they wait for clearer signals on monetary policy and geopolitical developments.

Featured image via Shutterstock.

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