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A slow-but-steady recovery in macro risk appetite has also seen crypto stage a modest recovery from its weekend lows. After revisiting spot prices not seen since April 2025, BTC and ETH now trade above $91K and $3K respectively.
Derivatives markets reflect this recovery, as altcoin perpetual swaps have printed several sessions of positive rates after a strong rate charged to holders or short positions over the weekend. Short-tenor implied volatility levels no longer trade at such an extreme premium after the normalization of the term structure of volatility, and puts no longer hold as strong a premium above calls (despite not fully pricing out a preference for downside protection).
However, measures of participation rates in derivatives remain subdued long after Oct 10, 2025's liquidation event, and open interest and volumes remain relatively low across instruments.
Block Scholes’ Risk Appetite Index measures the level of euphoria (above 1) or panic (below -1) in the spot market. Momentum in this index shows a strong relationship to spot returns.
Several large market-cap altcoins with significant open interest in perpetual swaps, including SOL, TON, CRV, and ADA, have recorded positive funding rates during the slow-and-steady recovery rally higher. However, the significant underperformance that altcoins have recorded in spot prices relative to BTC during the sell-off was reflected in perpetual swap funding rates. Where BTC and ETH have recorded consistently positive rates over the last two weeks, the weekend of Nov 22 and Nov 23, 2025 saw leveraged short positions in altcoin pairs charged a fee for the privilege of their short exposure.
BTC, along with other crypto-assets, has staged a steady recovery from last week’s extreme bearishness. The largest crypto-asset by market cap now trades above $91K, having just last week revisited price levels not seen since April 2025.
Crypto-assets have staged this recovery in tandem with a wider improvement in risk-on sentiment exemplified by the move higher in the S&P 500 index.
Further clarity in the macroeconomic picture is at least partly to blame – the slew of economic data releases brought about this week since the end of the U.S. government shut-down has cleared at least some of the fog that clouded Fed participant’s judgement of the Dec 10, 2025 monetary policy meeting.
In addition, Fed speaker John Williams on Friday gave the clearest indication that the Fed may be able to reduce rates by a further 25bps for a third consecutive meeting, resulting in market-implied odds of a 25bps cut rallying above 80%.