3 Minutes
Bitcoin’s derivatives market is showing robust activity even as spot BTC retreats from recent highs. The rebound many traders hope for appears tied to renewed spot ETF inflows and the market’s ability to look past large whale rotations into Ether and focus on fundamentals.
Market snapshot
Bitcoin BTC $110,306 traded down to $109,400 on Monday, its lowest level in more than six weeks. The pullback followed an $11 billion sale by a whale that had been dormant for five years, with proceeds rotating into Ether ETH $4,437 spot and futures on decentralized exchange Hyperliquid.
Futures positioning and open interest
Open interest in Bitcoin futures climbed to an all-time high of BTC 762,700 on Monday, up about 13% from two weeks prior. That rise — equivalent to roughly $85 billion in notional exposure — shows traders remain engaged with leveraged strategies despite a roughly 10% decline since Bitcoin’s Aug. 14 peak.
Bitcoin futures open interest, BTC. Source: CoinGlass
While high open interest signals liquidity and activity, it doesn’t automatically imply bullish consensus: longs and shorts are matched, and heavy leverage on the long side could prompt cascading liquidations if BTC slips decisively below $110,000.
Futures premium and funding
The two-month futures annualized premium sits near a neutral 8%, up from 6% last week but still shy of the >10% readings that typically accompany broad bullish conviction.
Bitcoin 2-month futures annualized premium. Source: Laevitas.ch
Bitcoin perpetual futures funding dipped back toward 11% after a brief spike. In balanced conditions the funding rate usually oscillates between roughly 8% and 12%. Some pressure on sentiment is explained by $1.2 billion in net outflows from U.S.-listed spot Bitcoin ETFs between Aug. 15 and Aug. 22.
Options skew and investor sentiment
Options traders are pricing extra protection: put options currently trade at about a 10% premium to calls, a clear sign of elevated hedging demand and short-term bearish bias. That reaction is understandable after a roughly $6,050 drop in two days and the reallocations by long-dormant whales into Ether.
Liquidations and liquidity
The correction forced overleveraged participants out of the market, producing roughly $284 million in long liquidations, according to CoinGlass. The episode demonstrated that Bitcoin markets maintain deep liquidity — even on quieter weekends — but also highlighted how leverage can amplify volatility when large holders rotate exposure.
What could reignite the rally?
A sustained push toward $120,000 will likely depend on renewed spot ETF inflows and a broader return of risk appetite. The looming $13.8 billion monthly options expiry this Friday may act as a short-term catalyst that determines whether institutional and retail participants increase their exposure or remain cautious.
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