The crypto market has displayed signs of resilience amid heightened macroeconomic uncertainty, with Bitcoin holding its ground despite volatile global conditions. Last week witnessed the most significant short squeeze since 2008, driven by erratic developments in the ongoing U.S.-China tariff conflict. Risk sentiment remains fragile, with potential policy shifts looming and adding to market unease. In this context, Bitcoin rebounded from the $75K level and is now challenging resistance near $88.5K, which aligns with the 200-day moving average. A decisive break above this level could open the door to $95K, though macro catalysts, such as a U.S.-China trade resolution, will likely determine the trajectory.
Ethereum, while attempting a short-term recovery, continues to underperform relative to Bitcoin. ETH briefly approached $1,700 but has failed to gain momentum, with the ETH/BTC ratio still hovering near multi-month lows at 0.019. Without a compelling Ethereum-specific narrative, upside potential remains limited. The $1,800 supply zone is yet to be retested, and key resistance above lies near $2,000–2,100.
The volatility landscape shows implied vols declining post-squeeze, while realized vols remain elevated due to recent swings. Carry remains negative in both BTC and ETH (-20 and -35 vols, respectively), signaling that stabilization is underway, though full normalization has yet to arrive. Bitcoin’s term structure has shifted from inverted to mild contango, while Ethereum’s remains slightly inverted.
Skew has flattened considerably: BTC skew dropped from -45 to sub -2, and ETH from -10 to around -3. This reflects reduced downside hedging demand and a tilt toward upside speculation, especially as traders rotate out of puts and into calls in anticipation of further risk-on moves. Long-dated skew in BTC remains in call premium, suggesting that the broader crypto market remains structurally bullish—despite growing bearish sentiment in equities. Until that skew meaningfully shifts to puts, the longer-term crypto bull regime remains intact.
In terms of relative value, Ethereum still appears weak. Put skew dominates the ETH curve, particularly in the short end, reflecting ongoing bearish sentiment. For this to reverse, a strong ETH-specific catalyst is needed. Should such a narrative emerge, bullish risk reversals—selling puts and buying calls—could offer attractive setups given the current skew dynamics. However, for now, ETH continues to behave like a high-beta downside asset, and traders are likely to remain cautious until a clear shift in sentiment or market structure presents itself.