TL;DR:
- Bybit published its crypto derivatives report alongside Block Scholes, analyzing market behavior amid escalating geopolitical tensions in the Middle East.
- Bitcoin briefly reached $74,000 and Ethereum approached $2,200 after recovering from lows of $63,000 and $1,800 respectively.
- Spot Bitcoin ETFs accumulated approximately $1.145 billion in the first three trading days of March.
Bybit published its latest derivatives analysis report in partnership with Block Scholes. The exchange used the report to examine the behavior of digital markets amid escalating geopolitical tensions in the Middle East, which have put pressure on the global financial sector.
According to the document, the major crypto assets showed strong resilience in the face of macroeconomic deterioration. Bitcoin briefly reached $74,000 and Ethereum approached $2,200, after hitting lows near $63,000 and $1,800 respectively following the outbreak of hostilities in the region. Their recovery occurred in parallel with an improvement in market sentiment.
Bybit: Implied Volatility and Hedging Demand
The announcement of U.S. airstrikes against Iran and the subsequent escalation in the Persian Gulf drove demand for more options. Short-term implied volatility climbed to around 60%, moderately inverting the volatility term structure. However, absolute levels remained well below the peaks seen in early February, when short-term volatility approached 100%.
In options markets, traders immediately pushed implied volatility higher following confirmation of the strikes. When Bitcoin returned to $63,000, put options were trading at a premium of approximately 15 volatility points above call options. The 25-delta put-call skew subsequently rebounded alongside the recovery in spot price.
Changes in perpetual contract funding rates indicated that the recent altcoin liquidation was driven primarily by futures selling rather than in the spot market. Funding rates for Bitcoin, Ethereum, and Solana turned negative following Iran’s response to U.S. missiles. Bitcoin normalized its rates quickly, while Ethereum recorded a second drop before stabilizing and Solana maintained predominantly negative rates.
Institutional Demand Shows Signs of Market Recovery
In the institutional market, Spot Bitcoin ETFs accumulated approximately $1.145 billion in the first three days of March. Meanwhile, Strategy, the firm holding the largest Bitcoin treasury globally, acquired approximately $204 million in BTC last week, the company’s largest purchase since late January.
Han Tan, chief market analyst at Bybit Learn, noted that crypto assets have outperformed traditional safe-haven assets such as the U.S. dollar and gold since the start of the Middle East conflict, though he clarified that much still needs to be demonstrated before they can claim that status in mainstream markets.
