10x Weekly Crypto Kickoff – Options Market Turns Neutral as Leverage Builds for Upside

The report covers derivatives positioning, volatility trends, and funding dynamics across Bitcoin and Ethereum, along with sentiment, technical signals, ETF and stablecoin flows, option activity, expected trading ranges for the next 1–2 weeks, and key upcoming market catalysts.

Why this report matters

The crypto market is steadily recovering from the October 10 crash, with our top post-crash altcoin pick (see October 13 report) up by 20% and likely to extend gains, as BTC and ETH skews show that derivatives markets have priced out most near-term risk. Funding rates point to renewed upside leverage, while ETF inflows will be critical this week to sustain momentum—just as our technical indicators (see October 24 report) anticipated.

Roughly 35% of U.S. market-cap companies (175 out of 500) will report earnings this week, with Wednesday’s releases and the FOMC meeting as key catalysts. The better-than-expected inflation data from last Friday support a continued disinflation trend. In contrast, implied volatility, our core call in last week’s Kickoff report, has indeed dropped sharply as options traders removed downside hedges. On-chain data remains somewhat bearish, but with tactical drivers in control, we continue to trade opportunistically in this environment.

Main data points

Crypto markets grind higher on lower volumes: The Crypto market cap stands at $3.83 trillion, 4.1% higher than the week before, with an average weekly volume of $153 billion, -31% below average. Weekly Bitcoin volume was $56.3 billion, -30% below average, while Ethereum volume was $35.5 billion, -31% below average. Ethereum network fees (0.1 Gwei) are in the 5th percentile, indicating low network usage.

Funding rates continue to increase with higher open interest as leveraged traders turn more bullish: The Bitcoin funding rate rose by 6.5% this week to 9.9%, which is in the 62nd percentile of the last 12 months. Futures open interest increased by $2.0 billion to $35.3 billion. The Ethereum funding rate rose by 7.9% this week to 14.2%, which is in the 73rd percentile of the last twelve months. Futures open interest increased by $1.2 billion to $21.1 billion. Bitcoin's open interest is 83%, while Ethereum's is 85%.

Rising BTC dominance favor Bitcoin over altcoins. Bitcoin dominance is 59%, up 0.2%, and Ethereum dominance is 12.8%, down 0%. Our model favors Bitcoin over altcoins, with Bitcoin expected to outperform. The model is -0.4% away from Bitcoin dominance flipping.

Stablecoin inflows remain moderately strong but volume drop off: The Tether USDT market cap is $183 billion, 0.66% higher than a week ago, while volume was $127.6 billion, -31% lower than average. Circle's USDC market cap is $76.2 billion, 0.4% higher than a week ago, while volume was $15.4 billion, 31% below average. The stablecoin minting indicator is in the 49th percentile, which is neutral. Last week, Stablecoins experienced a $1.5 billion increase, a neutral signal, compared to previous minting, which is in the 65th percentile. During the last 30 days, a total of $12.1 billion was minted.

BTC and ETH ETF inflows should resume this week. Bitcoin inflows were $447 million in the previous 7 days, which is in the 46th percentile, vs. $4.5 billion for the previous 30 days, which is in the 70th percentile. Bitcoin ETF inflows in October have reached $4.2 billion. Ethereum outflows were $-244 million during the last 7 days, which is in the 11th percentile, vs. $33 million over the previous 30 days, which is in the 44th percentile. Ethereum ETFs' net inflows in October are still $554 million.

Inflows into crypto continue, indicating no bull-market peak. Year-to-date, crypto markets have seen $145.5 billion of inflows, notably $76.5 billion from Stablecoins, $52.2 billion into Bitcoin (ETFs, Futures, MSTR), and $16.7 billion through Ethereum.

Bitcoin is in a bearish trend, but reversal indicators are mixed: Bitcoin's RSI stood at 52% with a Bullish indication, while the Stochastics indicator stood at 33% with a Bullish indication. An RSI above 70% combined with Stochastics above 90% may signal bearish conditions, while an RSI below 30% and Stochastics below 10% could indicate a bullish reversal. Bitcoin is 4.3% away from triggering a trend change, with the current trend being Bearish. A critical level is the 112,862 level for short-term bullish/bearish views. Major Bull/Bear Level is 111,839.

Similarly, Ethereum is also in a bearish trend with mixed reversal indicators. Ethereum's RSI stood at 50% with a Bullish indication, while the Stochastics indicator stood at 37% with a Bullish indication. An RSI above 70% combined with Stochastics above 90% may signal bearish conditions, while an RSI below 30% and Stochastics below 10% could indicate a bullish reversal. Ethereum is 6.2% away from triggering a trend change, with the current trend being Bearish. A critical level is the 4,034 level for short-term bullish/bearish views. Major Bull/Bear Level is 3,858.

Sentiment is now rebounding constructively: Our Bitcoin Greed & Fear Index prints 49% (range 0-100%) vs. 20% a week ago, which shows positive short-term sentiment. Our Ethereum Greed & Fear Index prints at 54% (range 0-100%) vs. 30% a week ago, indicating positive short-term sentiment. Sentiment readings above 90% typically indicate market exuberance and heightened risk of a correction. In contrast, levels below 10% often suggest conditions for a bullish reversal.

Realized volatility remains elevated and will likely trend lower over the next few weeks: Bitcoin's 30-day realized volatility is 44.4%, 8% above its 30-day average of 36.5%. Ethereum's 30-day realized volatility stands at 77.6%, 10% above its 30-day average of 68%. The realized volatility spread between ETH and BTC is in the 81st percentile, at 1.75, vs. a cycle average of 1.4. Bitcoin's volatility is in the 52nd percentile, while Ethereum's volatility is in the 80th percentile.

Potential range over the next 1 week (based on realized volatility): Based on a 30-day realized volatility of 44.4%, Bitcoin’s 1-week (7-day) 68% confidence interval implies a likely range of approximately $109,500 to $119,600, or ±4.3% from the current price of $114,441. This suggests moderate volatility, with Bitcoin trading near its 52nd percentile—indicating relatively stable behavior compared with its historical volatility. For Ethereum, with a 30-day realized volatility of 77.6%, the 1-week 68% confidence interval implies a likely range of roughly $3,970 to $4,310, or ±4.2% around the current price of $4,141. Ethereum’s volatility sits in the 80th percentile, reflecting elevated short-term risk and greater sensitivity to market swings than Bitcoin's.

What traders are pricing in: Derivatives markets are pricing a 3.7% move in BTC over the coming week, expanding to around 5.6% the following week. This implies a trading range of about $110,367 to $118,845 for this week and to roughly $108,300 to $121,240 by next week. For ETH, traders anticipate a sharper swing of 6.1% this week, widening further to nearly 9.4% by next week’s close. This implies a trading range of about $3,900 to $4,406 for this week and to roughly $3,764 to $4,544 by next week.

Implied volatility has sharply declined as less downside risk: Bitcoin’s option term structure flattened over the past week, with near-term implied volatility dropping from 46.3% to 41.3%, while longer expiries held steady around 46–47%. Traders are now pricing in less short-term event risk and expect volatility to gradually rise back toward 47–48% over the next year. Ethereum’s option term structure has flattened as short-dated implied volatility fell from 71.0% to 66.9%, while longer maturities held near 69%. Traders are pricing in reduced near-term event risk and a more stable volatility outlook over the next year, suggesting expectations of quieter short-term trading conditions after recent positioning adjustments.

Option skew indicates bearishness has been priced out now: Bitcoin’s risk reversals have turned sharply less bearish, with short-dated skews improving from -6.3% to -1.4%, and longer maturities nearing neutral around 0%. This shift shows traders have reduced downside protection demand and are increasingly pricing in a more balanced or mildly bullish outlook over the next year, consistent with improving sentiment and lower perceived tail risk. Ethereum’s risk reversals have turned slightly less bullish, with short-dated skews improving from -4.3% to -0.9%, but long-dated skews easing from +3.9% to +2.5%. Traders are still pricing a moderately bullish bias over the next year. However, the decline in longer-term skew suggests reduced confidence in sustained upside momentum and a shift toward more balanced expectations.

ETH upside call buying continues this week while BTC option flows more mixed: BTC option flows were predominantly Calls Sold, which accounted for 28.4% of the (notional) volume during the last week, followed by BTC Calls Bought, which accounted for 26.7% of the volume. ETH option flows were predominantly Calls Bought, accounting for 34.3% of the volume over the last week, followed by Calls Sold, which accounted for 29.3%. BTC option notional is $48.5 billion, up 193% from a year ago and 5.6% from a week ago. ETH option notional is $10.2 billion, up 198% from a year ago and 1.9% from a week ago.

Leveraged BTC futures traders rebuild positions but volumes remain low: Bitcoin positioning indicates a moderate build-up in leveraged longs as open interest rose 6% to the 83rd percentile, alongside a 6.5% uptick in funding rates. The rise in price (+4.2%) and open interest, despite relatively low trading volumes (18th percentile), suggests that recent gains are being driven by derivatives rather than broad spot participation. Compared with last week, traders appear more confident but increasingly exposed to potential long liquidation risk. Near-term risk/reward is tilting less favorably, with limited upside unless spot volumes and ETF buying confirm the move.

ETH funding rates normalize, leveraged long position building: Ethereum positioning shows a clear build-up in leveraged longs as open interest rose 6% to the 85th percentile and funding rates climbed nearly 8%. However, the 27% drop in trading volumes signals that fewer participants are driving the move, suggesting a narrower rally led by derivatives traders rather than spot demand. Compared with last week, bullish positioning has intensified despite weaker underlying activity. This setup increases near-term downside risk if momentum stalls, as crowded (leveraged) longs could unwind quickly in a low-liquidity environment.

Calendar/Earnings: 35% of the S&P 500 by number of companies (175 out of 500), majority on Wednesday October 29; US Durable Goods October 27, Blockchain Life 2025 Dubai October 28, October 29 FOMC meeting, October 30 BoJ and ECB, Cosmoverse 2025 Split October 30, October 31 APEC (Trump-Xi), plus China plenum, FOMC meetings: subsequent meetings: December 10.

Market View: The crypto market is entering a more constructive phase as derivatives indicators signal that the worst of the October deleveraging is behind us. Implied volatility has fallen sharply, risk reversals have normalized, and funding rates turned positive—all pointing to a gradual rebuild of bullish positioning. Bitcoin’s dominance continues to rise, confirming institutional preference for large-cap exposure, while Ethereum remains more volatile but increasingly supported by leveraged traders.

Still, the market’s reliance on derivatives over spot participation suggests that ETF inflows and stronger volumes are critical to sustain the recovery. With macro tailwinds from cooling inflation and dovish central bank expectations, crypto assets are positioned for a steady rebound into year-end—but traders should stay tactical, as low liquidity and crowded long positions could amplify short-term volatility.