Matrixport data shows that the nominal futures positions in the crypto derivatives market have been halved from $52 billion to $28 billion, with Bitcoin’s pricing power returning to spot supply and demand, signaling a market entering a low-volatility, churning period.
(Previous context: Bitcoin once broke through $96,500, reaching a two-month high; BitMine pledged an additional $300 million worth of ETH)
(Additional background: 0xTodd’s investment philosophy: Bitcoin + US Treasuries, a combination that allows you to “sleep well long-term”)

Table of Contents

• Derivatives scale halved: Spot reasserts dominance
• Position behavior divergence: Bitcoin advances, Ethereum contracts
• Rebalancing window during low volatility

In mid-January 2026, the crypto market experienced a structural cooling. The nominal Bitcoin options positions shrank rapidly from $52 billion to $28 billion within six weeks, a decrease of 45%. About $24 billion of leverage was unwound, marking a significant reduction in derivatives’ dominance over spot prices.

Derivatives scale halved: Spot reasserts dominance

According to Matrixport charts, several recent large settlements have liquidated a large number of high-leverage positions, removing the need for market makers to hedge large Gamma and Vanna risks through spot trading. In a short period, the options market has shifted from being the main driver of prices to a secondary role, with pricing power returning to the true supply and demand of Bitcoin spot.

📊Today’s analysis – 2026/1/14 ⬇️

Options no longer dominate price movements; market positions turn cautious#Matrixport #Bitcoin #BTC #Ethereum #ETH #Cryptocurrency #期权 #CryptoOptions #衍生品 #OpenInterest #市场结构 #Volatility pic.twitter.com/K8gbuHpOGG

— Matrixport Official Chinese (@Matrixport_CN) January 14, 2026

The “Gamma Squeeze” mechanism praised over the past two years, which caused amplified volatility every Friday during settlement, has now cooled down as leverage decreases. Periodic volatility has also diminished, and the market has shifted to a more conservative mode.

Position behavior divergence: Bitcoin advances, Ethereum contracts

Disaggregating the deleveraging data reveals two distinct paths. While Bitcoin investors’ participation has declined, they continue to accumulate bullish options positions, indicating expectations for policy benefits from the Trump administration and viewing $90,000 as a key support level. Conversely, Ethereum investors are choosing to stop renewing their positions, closing large amounts of their “long futures combined with puts” defensive strategies, with a clear rise in cautious sentiment.

As demand for insurance decreases, implied volatility also drops. Glassnode observations show that the overall IV has returned to the lows seen at the end of 2023, reflecting a reduced market expectation of short-term sharp fluctuations.

Rebalancing window during low volatility

For traders focused on short-term swings, reduced volatility means higher opportunity costs; for medium- to long-term position managers, low volatility provides a relatively stable environment for adding positions. Currently, the game is no longer about who can seize the moment during “news-driven” events, but about who can continuously absorb spot chips and lower holding costs when leverage catalysts are absent.

This structural shift at the beginning of 2026 indicates that, without additional leverage momentum, Bitcoin and Ethereum will more closely reflect real buying and selling, potentially lengthening cyclical trends. For capital allocators, the focus should shift to trading depth, basis trends, and on-chain accumulation rather than position distribution on a single settlement date.

The above is not investment advice.