Bybit, the world’s second-largest cryptocurrency exchange by trading volume, has published its latest Bybit x Block Scholes Crypto Derivatives Analytics Report, revealing that Bitcoin’s recent flash crash to $60,000 triggered the most extreme derivatives positioning since the collapse of FTX in November 2022.
Volatility Surges to Post-FTX Levels
The report highlights a sharp increase in short-term volatility. Implied volatility for both BTC and ETH surged to levels not seen since the FTX crisis. Seven-day Bitcoin implied volatility climbed above 100% as demand for downside protection reached multi-year highs.
Bitcoin Down 50% From Record High
Bitcoin has now fallen roughly 50% from its all-time high recorded in October 2025. This drawdown has led to significant capital outflows across the broader crypto market. However, BTC dominance has remained relatively stable, suggesting that investors are not treating Bitcoin as a traditional safe haven during this downturn.
Funding Rates Turn Negative Across Altcoins
The selloff has impacted nearly all major tokens. Funding rates for leading altcoins moved firmly into negative territory. Solana’s seven-day average funding rate dropped to -0.04%, marking its lowest level since the October 10, 2025 liquidation event. The data suggests that short sellers have been willing to pay premiums to maintain bearish positions.
According to the report, Bitcoin’s sudden drop to $60,000 on February 5, followed by a rapid rebound above $70,000 the next day, created significant disruption in derivatives markets. As of February 13, 2026, BTC is struggling to sustain levels above $66,000.
Altcoins have suffered even steeper losses. Ethereum briefly fell below $2,000, while Solana has declined more than 70% from its recent highs. Other large-cap cryptocurrencies, including XRP and BNB, are trading more than 60% below their peak prices.
No Flight to Quality Within Crypto
Unlike previous market corrections, Bitcoin dominance has not increased meaningfully during this decline. Instead of capital rotating into BTC, funds appear to be exiting the crypto market proportionally. Altcoin dominance has dropped from around 36% in October to roughly 30%, reinforcing a broad risk-off environment rather than a selective shift toward Bitcoin.
Market sentiment remains fragile. “Cryptocurrencies have largely shrugged off macroeconomic developments, while sentiment indicators continue to signal extreme fear,” said Han Tan, Chief Market Analyst at Bybit Learn. He added that with derivatives positioning reaching its most extreme levels since 2022, a sustained short-term recovery for major tokens may be difficult under current conditions.
The full Bybit x Block Scholes report offers an in-depth analysis of spot, futures, and options markets and is available for download.
