Weekly Derivatives Market Report (Issue 11 · Week 29, 2026)

01Overview of the Derivatives Market

As of July 17, 2026, the derivatives market showed a clear bias toward long positions, yet high-leverage exposures led to severe volatility during price corrections. The BTC funding rate was 0.0031%/8h, while ETH’s was 0.0026%/8h—both positive values indicating that longs had to pay fees to shorts, suggesting an overall bullish sentiment in the market. In terms of position sizes, BTC’s unclosed positions amounted to $47.14B, with a 24h change of +0.84%, whereas ETH’s unclosed positions were $26.02B, showing a 24h increase of +1.08%, reflecting continued capital inflows into the derivatives market and rising leverage levels.

The long/short ratio further confirmed the dominance of long positions at 1.87. However, the total liquidations in 24h reached 170 million, with 86.5% coming from long positions and 13.5% from short positions. This indicates that despite the strong bullish sentiment, overly leveraged long positions suffered heavy losses amid price fluctuations. Given the current prices of BTC at $62,937.00 (down 1.7% in 24h) and ETH at $1,833.14 (down 2.6% in 24h), high-leverage longs in the derivatives market face significant risks during dips in spot prices. While the overall market sentiment remains bullish, its vulnerability has increased.

02Funding Rate and Position Analysis

On 2026-07-17, the derivatives market exhibited a clear bullish dominance. The BTC funding rate was 0.0031%, ETH’s was 0.0026%, and SOL’s was 0.0014%. All three rates remained positive, indicating that bulls had to pay fees to bears, suggesting the market was in a state of bullish premium. BTC had the highest rate, reflecting its relatively higher bullish congestion as a benchmark asset.

In terms of open interest, BTC’s open interest reached $47.14B, ETH’s was $26.02B, and SOL’s was $4.82B. BTC and ETH held absolute dominance, accounting for over 90% of the total derivatives exposure, indicating that institutional funds were still heavily concentrated in these leading assets. Although SOL had a smaller scale, it had the lowest rate, suggesting relatively moderate speculative enthusiasm.

The ratio of long to short accounts further confirmed the sentiment trend: for BTC, the ratio was 65.1% long to 34.9% short; for ETH, it was 69.1% long to 30.9%; and for SOL, it was as high as 72.8% long to 27.2% short. SOL had the highest proportion of long positions, indicating that smaller-cap assets tend to attract more aggressive bulls during recovery cycles. Coupled with Morgan Stanley’s launch of spot trading at a 0.5% fee on 07-16 and its plans to introduce ETH/SOL collateralized ETFs, the expansion of traditional financial entry points may be driving both retail and institutional funds to flow in simultaneously, boosting long positions. Although the fees did not indicate extreme overheating, the high proportion of long positions warrants caution regarding liquidation risks due to short-term corrections.

03Liquidation and Leverage Risks

On 2026-07-17, the total 24-hour liquidation value across the entire market reached $170 million. Long positions accounted for 86.5% of these liquidations, while short positions made up only 13.5%, indicating that long-position leverage is under significant deleveraging pressure amid price fluctuations.

Looking at specific cryptocurrencies, LTC led with a liquidation volume of $150,000. WIF and PARTI each recorded liquidation volumes of $30,000, followed by FOGO at $20,000. Additionally, cryptocurrencies such as BB, PROM, USAR, HUMA, AIXBT, AT, NVO, CATI, BMNR, RIVN, JOE, WAXP, DOLO, LSK, and JPM also experienced liquidations to varying degrees. Among them, BB had a liquidation volume of 9,439, PROM at 4,763, and USAR at 5,277.

Currently, the main leveraged risk in the market lies with long positions. The high proportion of long-position liquidations suggests excessive speculation in the market, resulting in substantial systemic risk exposure. Investors should be vigilant about the risk of cascading liquidations caused by high leverage levels. It is advised to reduce leverage ratios and manage positions carefully to cope with potential market volatility.

04Emotions and Capital Flows

The Market Fear & Greed Index read 42/100, indicating a fearful sentiment as investors remained cautious. There is a divergence of views among market participants: on one hand, the capital flow into Bitcoin ETFs reversed, shifting from a cumulative net inflow of over 500,000 BTC in 2024 to a cumulative net outflow of around 120,000 BTC, reflecting pressure for institutional funds to withdraw; on the other hand, BlackRock purchased Bitcoin worth $33,400,000, providing some support for bulls. Additionally, Ethereum founder Vitalik Buterin warned that quantum computers could threaten the security of Ethereum and Bitcoin by 2028, raising concerns about long-term technical risks. Popular topics include developments at the Upbit exchange, Robinhood Chain, the tokenization of RWA assets, and regulations regarding Thai stablecoins. Macroeconomic data plays a significant role in driving crypto market trends.

05Outlook and Risks

On 2026-07-17, the derivatives market exhibited a volatile pattern amid the entry of institutional investors and unusual activities on the blockchain. Compared to the bullish frenzy in the previous period, market enthusiasm has cooled down. Both BTC, currently trading at $62,937.00, and ETH, at $1,833.14, saw slight declines, indicating pressure from short-term profit-takers to exit their positions.

Neutral Outlook: Traditional financial giants are accelerating their penetration into this sector. On 07-16, Morgan Stanley launched spot trading services via the E*TRADE platform with a fee of 50 basis points, covering BTC, ETH, and SOL. This move signifies further expansion of institutional access channels. However, the 0.5% fee structure remains higher than that of some leading exchanges, making it unlikely to attract large-scale retail investment in the short term. Instead, it tends to facilitate optimization of existing asset allocations.

Positive Signals: The Bitcoin credit market has shown remarkable resilience. The credit market, worth tens of billions of dollars, recovered rapidly after the liquidation wave in June. This has encouraged Japan to launch tokenization pilots, with industry estimates suggesting the market size could exceed $50 billion by 2027. Additionally, despite a 38% decline in digital assets under management at BlackRock in the first half of the year, the company remains committed to building new growth areas through stablecoin reserves and tokenization strategies, aiming to integrate traditional products into 5 billion digital wallets. This strengthening of fundamentals after the “worst is over” provides support for prices in the medium to long term.

Risk Warnings: Unusual activities by large Whale holders on the blockchain and regulatory uncertainties pose significant downward risks. On 07-16, a Bitcoin wallet that had remained inactive for eight years suddenly transferred 5,908 BTC, worth $383 million, likely in preparation for OTC transactions, which could trigger localized selling pressure. Meanwhile, Coinbase’s quiet approval of account registrations using mainland ID cards aims to capture existing assets but faces four major risks: account freezes, legal uncertainties, and unchanging compliance constraints. If regulations tighten or Whales engage in mass sales, market liquidity could dry up instantly.

Key Risk Factors:

1. Whale Selling Pressure Risk: The transfer of $383 million from a dormant wallet for eight years could spark panic in the market. If more similar large-scale transfers occur, it will directly threaten the support level of BTC at $62,937.00.
2. Compliance and Regulatory Risks: Although Coinbase has not officially announced allowing registrations from mainland users, such actions still carry risks of legal uncertainties and account freezes. Clear prohibitions from regulators could undermine market confidence.
3. Quantum Computing Threat: Though Project Eleven has introduced new protocols to address the threat posed by quantum computing, technical implementation still takes time. If progress in quantum computing accelerates, it may raise concerns about the security of long-term assets.

06Related Reads

1. “Traditional Giants Enter the Game: 0.5% Fee Structure Launches Spot Crypto Trading”
2. “Quantum Threat Looms as Project Eleven Introduces New Solution for Bitcoin Ownership Verification”
3. “Despite Billions in Daily Activity, Bitcoin Credit Market Tests Its Resilience Amid Liquidations”
4. “BlackRock’s Secret Takeover: From ETF Bait to Underlying Blockchain Operating System”
5. “Chain Activity Leads to Case Withdrawal: Lawsuits Against 44 Bitcoin Wallets Rejected”
6. “8.6 Million Families Can Buy Cryptocurrencies: Morgan Stanley’s Fee Is Just 50 Basis Points”
7. “BlackRock Suffers $30 Billion Losses but Remains Betted In: 5 Billion Wallets Become New Battleground”
8. “Eight-Year-Sleeping Whale Awakens: $383 Million Transferred Mysteriously”
9. “Behind the $1.059 Billion Valuation: Coinbase’s Ambitions Regarding Options Linked to Chinese ID Cards”