According to the source, a large crypto derivatives liquidation cascade hit the market, prompting forced unwinds across major venues and sharp deleveraging in BTC and ETH futures (sources: CoinGlass liquidation dashboard; Binance Research Derivatives Insights 2023). Historically, on the biggest deleveraging days, BTC and ETH open interest drop by roughly 20–30% in 24 hours while funding rates turn negative for multiple sessions, indicating capitulation and a cleaner market structure for mean reversion trades (sources: CoinGlass open interest and funding dashboards; Glassnode Week On-Chain reports 2022–2024). Spot-futures basis often inverts or compresses materially, enabling short-basis or neutral cash-and-carry opportunities until premiums normalize (sources: CME CF Benchmarks basis data; Kaiko derivatives market structure studies 2023). Options implied volatility typically spikes across BTC and ETH tenors, favoring long-volatility or gamma scalping tactics into peak IV with risk managed via term structure and skew signals (sources: Deribit Insights volatility reports; Amberdata options analytics 2023). Confirmation for re-entry includes stabilizing open interest, funding reverting toward neutral, narrowing bid-ask spreads, and recovering market depth at top-of-book (sources: Kaiko market depth metrics; Binance Research liquidity studies 2023).

According to @ThinkingUSD, current backwardation in crypto perpetual swaps creates an opportunity to rotate from spot holdings into equivalent long perp positions to capture funding and basis while maintaining directional exposure. Source: @ThinkingUSD on X, Oct 10, 2025; Binance Academy, Perpetual Futures and Funding Rates; CME Group, Backwardation definition. The core trade is to sell spot and buy the same notional in perps trading below spot so you receive negative funding and potentially profit as the perp discount narrows toward spot. Source: Binance Academy, What Are Perpetual Futures and Funding Rates; CME Group, Understanding Backwardation. Traders should verify that the funding rate is negative and that the perp price is at a discount to spot before execution, and size with conservative leverage to reduce liquidation risk. Source: Binance Academy, Perpetual Futures Funding Rates and Liquidation. Execution costs and regime shifts can negate the edge, so monitor fees, slippage, and funding updates across high-liquidity markets such as BTC and ETH. Source: Binance Academy, Perpetual Futures Liquidity and Costs.

According to @secondswap_io, WLFI contract price is $0.297 while WLFI IOUs trade at $0.56–$0.57, implying an approximate 88–92% premium and a near 2x spread, source: @secondswap_io. They add that this gap reflects strong anticipation around the event, with structured liquidity designed to balance transparency, governance, and price stability, source: @secondswap_io. For traders, monitoring the IOU–contract basis and updates on the event timeline can help assess momentum and potential spread convergence risk, source: @secondswap_io.

According to @ai_9684xtpa, $IN has already listed on derivatives contracts, and the author notes the price remains resilient after the listing, source: @ai_9684xtpa. A futures listing typically broadens liquidity and enhances price discovery, which can influence short-term volatility and spreads, source: CME Group. For trading, monitor three perp metrics: funding rate to read long-short skew, basis versus spot for carry signals, and open interest to track leverage build-up, source: Binance Academy. Rising open interest with flat price and persistently positive funding often signals crowded longs and squeeze risk, while increasing open interest with neutral funding and a mildly positive basis tends to indicate healthier demand, source: Binance Academy.

According to Eric Balchunas, $IBIT has attracted significantly higher inflows compared to other Bitcoin ETFs, with ten funds registering net positive flows, but IBIT standing out in volume. This divergence is unusual, as inflows are typically more evenly distributed among spot Bitcoin ETFs. Balchunas attributes this to the resurgence of the hedge fund basis trade and increased activity from institutional investors following Bitcoin's decoupling and subsequent price rally. For traders, this signals heightened institutional confidence in IBIT as a preferred vehicle, potentially leading to increased liquidity and tighter spreads, which could present arbitrage and volume-based trading opportunities. Source: Eric Balchunas via Twitter, May 5, 2025.

According to Eric Balchunas, Bitcoin ETFs have experienced a significant surge, consuming nearly 25,000 BTC within three days. Notably, $IBIT alone attracted $643 million yesterday, ranking it as the top ETF. This indicates how swiftly ETF flows can escalate, potentially due to the resurgence of basis trades.

According to Farside Investors, the spread between the Bitcoin basis rate and government bond yields is narrowing. Given that government bonds are considered much lower risk, a further narrowing of this spread could potentially lead to a drying up of the basis trade. This analysis suggests a shift in the risk-reward balance for traders involved in basis trades, indicating a need for careful monitoring of these rates for future trading strategies.

According to Miles Deutscher, the amount of Bitcoin ($BTC) held in CME open interest has decreased to levels seen before the recent election. This reduction is attributed to the unwinding of the basis trade, which has contributed to a reset in the total leverage within the system. This development indicates a potential stabilization in trading dynamics, which could affect traders' strategies around leverage and risk management.