Bitcoin extended recent losses at the start of the week as derivatives markets signaled a clear shift toward risk-off positioning, with traders increasing demand for near-term downside protection.

Bitcoin was trading below $70,000 after falling more than 2.8% over the past 24 hours, according to market data. While the asset has rebounded from last week’s lows near $60,000, it has struggled to regain upward momentum following the sharp sell-off that unsettled broader crypto markets.

The weakness spilled across major tokens. The CoinDesk 5 Index fell 3.4%, with all five of its constituents posting losses. Ether dropped around 5%, underperforming Bitcoin as traders reduced exposure across large-cap assets, though it held above the $2,000 psychological level. The broader CoinDesk 20 Index declined 3.7%.

Derivatives data points to deleveraging

Futures and options markets indicate sustained defensive positioning. Bitcoin futures open interest has fallen from roughly $19 billion to $16 billion over the past week, signaling ongoing deleveraging.

Funding rates have also turned neutral to negative across major venues, with rates at Bybit falling to -2.24% and Binance at -0.5%, suggesting short sellers are increasingly in control. The three-month futures basis has compressed to about 3%, pointing to softer institutional demand.

Options markets reinforce the cautious tone. One-week 25-delta skew for Bitcoin has climbed to 20%, while call option dominance has slipped to 48%, indicating stronger demand for downside hedges. Implied volatility is in sharp backwardation, with near-term volatility around 85%, compared with longer-dated expectations near 50%, reflecting elevated concern over short-term price swings.

Liquidations remain elevated

According to Coinglass, total liquidations reached $397 million over the past 24 hours, split roughly 45% long and 55% short. Bitcoin accounted for about $234 million in liquidations, followed by Ether at $74 million and Solana at $14 million.

Binance liquidation data points to $68,160 as a key level to watch if prices move lower, where additional forced selling could emerge.

Smaller tokens under pressure

Risk aversion has also weighed on newer assets. Rainbow wallet’s recently launched RNBW token fell roughly 75% from its ICO price, amid reports of distribution delays and infrastructure-related issues.

Overall, market data suggests traders are prioritizing capital preservation as volatility remains elevated, with derivatives positioning indicating continued caution until clearer signs of stabilization emerge.