Bearish sentiment builds in crypto as volatility and hedging rise

Markets Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email Bearish sentiment builds in crypto as volatility and hedging rise Bitcoin’s brief rally faded amid war-driven oil price surge, rising volatility and declining futures interest, signaling growing caution across crypto markets. By Oliver Knight , Omkar Godbole | Edited by Sheldon Reback Mar 31, 2026, 10:34 a.m. Make preferred on BTC/USD (CoinDesk Data) What to know : BTC spiked to $68,300 before falling to $66,500, while implied volatility (as measured by the BVIV index) climbed to 58%, pointing to more turbulence ahead. Futures open interest has dropped over 18% this year, with broad declines across major tokens indicating capital outflows. Options markets show strong demand for downside protection, with the $60,000 BTC put the most crowded trade. The crypto market exhibited signs of volatility on Tuesday, with bitcoin BTC $ 66,278.03 spiking to $68,300 shortly after midnight UTC before tumbling back to $66,500. The initial spike was spurred by reports that U.S. President Donald Trump was willing to end the war in Iran without the Strait of Hormuz being opened. The optimism faded after Israeli officials said they were prepared to "keep operating for weeks to come." The war, now in its 32nd day, has sent energy prices surging, with Brent crude trading around $107 per barrel, leading to inflation concerns and widespread risk-off sentiment. Crypto, while being relatively resilient throughout March, is beginning to show signs of weakness after bitcoin failed to rise above $75,000 on two occasions. U.S. equities diverged from the crypto market on Tuesday, with Nasdaq 100 and S&P 500 index futures both adding 0.8%. Derivatives Positioning Cumulative industry-wide crypto futures open interest (OI) dropped over 3% to $103.79 billion in 24 hours, continuing the risk-off trends observed throughout the first quarter. The tally has declined by over 18% since the start of the year. OI has declined across BTC, ETH, SOL, and XRP futures, indicating capital outflows from the major cryptocurrencies. Other tokens, such as BCH, AVAX and LTC, have seen double-digit percentage declines in open interest. Privacy-focused ZEC stands out, with its futures market exhibiting bullishness. The token's OI rose more than 3% alongside mildly positive funding rates and cumulative volume delta. This combination points to an increasing demand for bullish exposure. At the other end is DOGE, which has the most negative 24-hour cumulative volume delta among major tokens. Bitcoin's 30-day implied volatility index, BVIV, has ticked up to 58% from 54% late last week, topping its 50-day average to suggest more gains ahead. This means potential for increased price turbulence. Ether's volatility index remains dead flat between 70% and 80% for the seventh straight day. On Deribit, bitcoin risk reversals out to the June end expiry show a strong bias for put options. These downside hedges trade at an 8 to 10 volatility-point premium to calls. Meanwhile, bearishness is relatively measured in ether. The $60,000 bitcoin put remains the most popular play with a total open interest of $1.50 billion. Token talk The altcoin market suffered more than bitcoin on Tuesday, with tokens like NEO, HBAR and PUMP losing between 2.6% and 3.3% since midnight UTC. A select few tokens are bucking that trend, including BCH and AI-related coins, which are in the black. CoinMarketCap's "Altcoin Season" indicator is currently printing 51/100, reflecting relative strength over the past few weeks in spite of Tuesday's selloff. However, the next major move will still be determined by bitcoin and whether it can either break above $75,000 or below $62,000. Altcoins typically perform well when bitcoin consolidates, but lose ground during big swings. Crypto Markets Today More For You The Definitive Stablecoin Landscape Series: North America By CoinDesk Research Mar 26, 2026 Commissioned by Ripple As stablecoins evolve into core financial infrastructure, North America leads. This report maps the regulation, market shifts, and players driving adoption. Why it matters : Stablecoins are entering their third phase of evolution - the institutionalization era - becoming increasingly embedded into core financial infrastructure. As institutions prioritize transparency and compliance, regulated issuers like USDC, RLUSD, and PYUSD are steadily gaining share with RLUSD surpassing $1B in market cap within its first year. North America, leading in regulatory frameworks and institutional distribution, is at the center of it all. View Full Report More For You David Bailey’s Nakamoto sells roughly 5% of its bitcoin holdings, offloading 284 BTC By James Van Straten , AI Boost | Edited by Sheldon Reback 54 minutes ago The sale underscores liquidity pressures as the company continues its pivot to a bitcoin treasury strategy. What to know : Nakamoto sold 284 bitcoin for $20 million, giving an average sale price of $70,422 per bitcoin. The company’s stock has fallen around 99% from its all-time high in May 2025. 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