Bitcoin futures basis turns negative for first time since August amid DeepSeek market volatility

The bitcoin futures basis has made a bearish move into negative territory for the first time in months, amid DeepSeek triggered de-risking and market volatility, an analyst has said.

"The Nvidia crash yesterday had ripple effects on the crypto market, with CME traders rapidly de-risking," K33 Head of Research Vetle Lunde posted on X.com. "Bitcoin futures basis fell to negative terrain for the first time since August 2023, while notional open interest saw its largest daily decline ever of a massive 17,225 bitcoin."

The futures basis is the difference between the price of a futures contract and the current spot price of the underlying asset, in this case bitcoin , and serves as an indicator of market sentiment and expectations. When the futures basis falls into negative territory, it signals a shift to bearish sentiment, with traders willing to sell futures below the spot price amid heightened risk aversion.

Bitcoin stabilizes after heightened market volatility

Bitcoin briefly dipped below $98,000 during overnight trading but has since found support, hovering above the $102,000 mark. Recent price swings appear to be driven more by broader risk-off sentiment than by crypto-specific catalysts.

Uncertainty surrounding the U.S. Federal Reserve's interest rate trajectory, speculation over Trump tariffs, and the disruption caused by DeepSeek's new AI model are just some of the factors that have further complicated the outlook for risk assets.

China-based startup DeepSeek unveiled a new model on Monday that reportedly rivals leading U.S. offerings at a fraction of the cost. The announcement sent shockwaves through equity markets, particularly the tech-heavy Nasdaq Composite, which dropped 3.1%.

This week's Tech earnings reports could add to market volatility

This week’s earnings reports from major technology companies, including Meta, Microsoft, Tesla, and Apple, could add to the volatility. Investors remain sensitive to competition in the AI sector, especially following DeepSeek’s disruptive announcement. QCP Capital analysts said that any additional shocks from corporate results could further weigh on risk assets like bitcoin .

"Uncertainties surrounding the Fed’s rate path, Trump’s policies, and this week’s upcoming tech earnings are poised to add downside risk to risk-on assets," QCP Capital analysts said.

Despite these concerns, U.S. equities showed signs of resilience in pre-market trading, with SP 500 futures rising 0.12% and Nasdaq futures up 0.24%. The Kobeissi newsletter highlighted a more optimistic outlook for Nvidia, suggesting that the long-term implications of AI advancements could benefit the chipmaker. "In theory, AI advancement is bullish for Nvidia because it means more chip demand," Kobeissi newsletter posted on Tuesday.