Crypto derivatives markets are showing early signs of renewed confidence, with excess leverage largely flushed out, funding rates turning positive and institutional basis edging higher — even as traders continue to hedge against short-term downside risks.

Bitcoin briefly approached $67,000 early Friday before pulling back, but remained about 1% higher since midnight UTC. Ethereum gained roughly half as much. The broader CoinDesk 20 Index was up around 0.7%, indicating limited overall movement.

The modest recovery follows weakness during Thursday’s U.S. session that dragged prices back toward last week’s lows. Even so, bitcoin is still on course for a fourth consecutive weekly decline — its longest losing streak since mid-November. Softer volatility and slowing trading activity have also dampened volumes.

Attention now turns to the upcoming U.S. Consumer Price Index (CPI) report, which could shape near-term direction. A stronger-than-expected inflation print may push bond yields and the dollar higher, pressuring risk assets. A softer reading, however, could reinforce expectations for easier financial conditions and support renewed appetite for risk.

Despite the tentative stabilization, bitcoin would need a significant rally to reach $85,000 — a level that Jean-David Péquignot, chief commercial officer at Deribit, has said would signal that the cryptocurrency’s longer-term bullish trend is no longer “broken.”

Derivatives Overview

• Open interest has fallen to $15.5 billion, suggesting late-cycle leverage has been largely cleared from the market.
• Perpetual futures funding rates have shifted from neutral to positive across major venues, ranging between 0% and 8%. Institutional sentiment appears to be firming, with the three-month annualized futures basis climbing above 3%, pointing to improving professional conviction.
• In options markets, call volume has risen to around 65%, while the one-week 25-delta skew has eased to 17.9%. However, the implied volatility term structure remains in short-term backwardation, indicating traders are still paying a premium for immediate downside protection.
• Data from Coinglass shows $256 million in liquidations over the past 24 hours, with approximately 69% tied to long positions. Bitcoin accounted for $112 million, ether for $52 million and other tokens for $16 million in notional liquidations.
• The liquidation heatmap on Binance highlights $68,800 as a key upside level to monitor.

Token Developments

PUMP, the token linked to Solana-based memecoin launchpad Pump.fun, has climbed more than 5% over the past 24 hours.

The platform recently introduced a feature allowing token communities to allocate fees directly through its mobile app, including integration with GitHub accounts. The update enables automated payouts to creators and is expected to pave the way for additional social features.

Communities can now direct a portion of token-generated fees to support GitHub contributors, who must claim the rewards via the app.

Pump.fun played a central role in last year’s memecoin trading boom, when monthly volumes surged beyond $11 billion. Activity has since cooled sharply, with volumes falling to about $1 billion last month, according to data from DeFiLlama.