February 27, 2026 By Dr. Sean Dawson
The crypto market is beginning to show early signs of stabilization after weeks of uncertainty, with derivatives positioning suggesting traders are quietly preparing for a recovery while still maintaining meaningful downside protection.
After a brief uptick at the start of February, Bitcoin volatility has settled back into the 50% range, which is historically associated with consolidation rather than panic selling.
At the same time, 25-delta skew, a key sentiment indicator in options markets, has rebounded sharply from late-February lows. Moving from roughly -15% to around -7%, the shift signals that traders are becoming less aggressively defensive and more balanced in their outlook.
BTC 25 delta skew for various tenors
Source: Derive.xyz, Amberdata
Options positioning reinforces this cautious optimism. The BTC March 27 expiry, which is currently holding the largest open interest across the market, shows significant call accumulation at the $80K and $90K strikes. This clustering suggests bullish traders are positioning for a recovery into the $85K to $95K range over the coming month as liquidity conditions stabilize.
However, conviction remains tempered. On the bearish side, substantial put open interest remains concentrated at the $60K and $55K strikes, indicating bears expect any drawdown to be contained within a defined range rather than a capitulation event.
Ethereum derivatives markets tell a similar story of asymmetric positioning. A notable build-up of call exposure around the $3.5K strike suggests traders are pricing in the possibility of a sharp reversal for the second-largest digital asset. At the same time, strong put demand at the $1.8K level highlights continued hedging against macro risk and delayed capital inflows.
Taken together, the data points toward a market attempting to form a base. Volatility compression, improving sentiment metrics and increasingly structured positioning suggest traders are transitioning away from defensive panic toward conditional optimism, preparing for upside participation while remaining protected against another leg lower.
