Bybit and Block Scholes Report Unveils Cryptocurrency Market Dynamics Post-Flash Crash
Bybit, renowned as the world’s second-largest cryptocurrency exchange in terms of trading volume, has partnered with Block Scholes to release a comprehensive report on crypto derivatives. This collaboration sheds light on significant market changes following Bitcoin’s (BTC) recent flash crash, marking some of the most intense derivatives positioning since November 2022, post-FTX collapse.
Bitcoin’s Price Fluctuations Amid Market Turbulence
As per the findings disclosed to Finbold on February 13, Bitcoin experienced a brief drop to $60,000 on February 5. It managed to bounce back above $70,000 the following day. However, by February 13, Bitcoin was grappling to maintain its position at the $66,000 threshold.
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Volatility Surges and Funding Rates Shift
The report emphasizes a significant spike in short-term implied volatility for both Bitcoin (BTC) and Ethereum (ETH), levels reminiscent of the FTX collapse. The seven-day BTC implied volatility surpassed 100%, fueled by a surge in demand for downside protection.
Bitcoin’s value has dropped approximately 50% from its peak in October 2025, triggering proportional capital withdrawals across the broader crypto landscape. Interestingly, unlike previous downturns, BTC dominance has not increased as a perceived safe haven. Instead, altcoin dominance has declined from 36% in October to about 30%.
Market Sentiment and Altcoin Impact
The Block Scholes’ Risk Appetite Index monitors market sentiment, indicating euphoria when above 1 and panic when below -1. Changes in this index often closely align with spot price shifts. The recent selloff also impacted altcoins significantly, with ETH dropping below $2,000 and SOL plummeting over 70% from recent highs. Major tokens like ETH, XRP, and BNB have seen declines exceeding 60% from their peaks.
Negative Funding Rates Across Altcoins
Funding rates for key altcoins have turned notably negative. Solana’s (SOL) seven-day average funding rate dropped to -0.04%, the lowest since the October 2025 liquidation event. This indicates that short sellers were paying premiums to sustain bearish positions.
Market Analyst Insights
According to Han Tan, Chief Market Analyst at Bybit Learn, “Cryptocurrencies have largely ignored macroeconomic events, with sentiment still entrenched in ‘extreme fear’. Given the recent extreme positioning in crypto derivatives, a strong, sustained rebound for major tokens seems challenging in the current environment.”
The comprehensive Bybit x Block Scholes report delves deeper into spot, futures, and options markets and is available for download.
