TLDR:

• Open Interest spiked sharply in April, signaling crowded and unstable positioning across Bitcoin derivatives markets.
  
• Negative funding rates during the rally confirm shorts are being squeezed out, not that bulls are leading organically.
  
• Perp CVD is rising while Spot CVD stays flat, proving the current move lacks genuine spot market buying support.
  
• Bitcoin must hold above $80,000 to target $85,000 — a breakdown below that level reopens significant downside pressure.

Bitcoin short squeeze activity is currently driving prices higher in the cryptocurrency market. The Consumer Price Index rose again recently, pointing to sticky inflation that shows no clear resolution.

Despite this, Bitcoin is pushing into a key resistance zone. Analysts note this is not a one-way market. Mixed scenarios and liquidity moves are expected as conflicting signals continue to play out across the market.

Open Interest Spike Points to Crowded and Fragile Market Conditions

Open Interest in Bitcoin’s derivatives market spiked sharply during April. Market analyst Boris of @Fundingvest described the rapid buildup as aggressive and unhealthy positioning.

Such a surge indicates that positions are becoming deeply crowded. This overcrowding makes the current price move unstable and exposed to sudden and sharp reversals.

After the OI spike, funding rates remained negative even as prices climbed. Negative funding during a price rally is a direct indication of crowded short positioning.

In response, the market pushed prices higher, forcing short sellers to cover their positions. This pattern reflects a textbook short squeeze playing out within the derivatives segment.

Meanwhile, Perpetual CVD has been driving prices higher throughout this period. Spot CVD, however, remained largely flat during the same time frame.

Boris pointed out that this divergence makes the analysis straightforward. The current rally is derivative-driven and lacks support from genuine spot market buying activity.

Without spot market backing, the sustainability of this rally remains questionable. Price increases unsupported by spot buyers tend to be temporary. The liquidity built through the short squeeze may later be used against new long positions. This sets up the next key risk forming in the market.

Long Trap Risk Builds as Shorts Exit and New Longs Enter

As shorts exit under pressure, longs are now beginning to take their place. Boris flagged this transition as a possible setup for a long trap in the coming weeks.

A long trap forms when buyers enter aggressively near highs, only to face a sharp reversal. This cycle is a recurring pattern in Bitcoin’s derivatives-driven market.

Bitcoin’s price structure is also forming a minor Higher High and Higher Low sequence. On the surface, this HH-HL pattern carries a mild bullish reading.

However, Boris outlined two clear scenarios based on where price holds from here. A failure to maintain above $80,000 would open the door to further downside pressure.

Conversely, holding above $80,000 could push Bitcoin toward the next target near $85,000. The $80K level is therefore acting as the market’s key line in the sand.

Traders monitoring this structure will seek confirmation of either a breakdown or continuation. The outcome around this price level may define Bitcoin’s short-term trajectory.

CPI data continues to add uncertainty to an already complicated macro setup. Sticky inflation does not offer a clear directional signal for Bitcoin.

With the current derivatives positioning, the market remains exposed to sharp moves in either direction. Caution and active risk management remain essential for all market participants.

The Ethereum Foundation has unstaked 17,035.326 ETH, worth about $40 million, shortly after moving close to its 70,000 ETH staking target. 

Arkham data showed the transaction on Saturday. The foundation deposited wrapped staked ETH into Lido’s unstETH contract. The ETH will return after the withdrawal queue completes, based on Ethereum’s normal unstaking process.

The Ethereum Foundation began staking ETH after changing its policy in June 2025. The group said staking and DeFi activity would help fund protocol research, development, and ecosystem grants.

Since February, the foundation has increased its staked ETH balance. It started with 2,016 ETH, added 22,517 ETH in March, and later staked more than 45,000 ETH this month.

Those transactions lifted its total staked ETH to about 69,500 ETH. The figure placed the foundation close to its stated 70,000 ETH staking goal before the latest withdrawal.

Unstaking raises market questions

The Ethereum Foundation has not explained why it unstaked over 17,000 ETH. The lack of a public reason led some market users to question whether the ETH could move to exchanges or be sold.

One user wrote, “The biggest seller of ETH continues to be the people who created ETH.” The comment reflected market concern, though no official statement has linked the unstaking move to a sale.

In Ethereum, staking locks ETH to help secure the network through validators. Unstaking starts a withdrawal request, places funds in a queue, and releases ETH after the waiting period ends.

DeFi recovery efforts continue after rsETH exploit

The move also comes as DeFi protocols work to support rsETH after a large Kelp restaking exploit. The incident involved more than 116,000 restaked ETH tokens and left bad debt across lending markets.

Aave has led a DeFi United recovery effort with support from Lido DAO, Golem Foundation, EtherFi Foundation, and Mantle. Backers have pledged more than 43,500 ETH, worth about $101 million, to help stabilize rsETH.

Ethereum co-founder Vitalik Buterin has also warned about risks tied to large foundation staking. He said heavy staking by the foundation could create governance concerns during disputed hard forks.

TLDR:

• Bitcoin surged to $79,447 on April 22 as futures Open Interest expanded by nearly $3 billion.
  
• Spot Bitcoin ETFs recorded a net outflow of $1.845 billion on the same day BTC hit its peak.
  
• Open Interest fell from $27.56B to $25.26B between April 22 and 24, confirming position unwinding.
  
• Dual pressure from spot ETF outflows and futures closures explains why Bitcoin stalled at $79,447.

Bitcoin’s April 22 price surge to nearly $79,447 has drawn renewed scrutiny from on-chain analysts. Data reviewed by CryptoQuant verified analyst Carmelo Alemán points to futures market activity, not spot buying, as the primary driver of the move.

Spot Bitcoin ETFs recorded a net outflow of $1.845 billion on the same day prices peaked. The pattern challenges the narrative that institutional spot demand powered the rally.

Futures Expansion Drove Bitcoin’s Short Squeeze Above $79,000

Open Interest in Bitcoin futures expanded by nearly $3 billion on April 22. That expansion preceded the intraday high of $79,447 recorded that day.

Analysts often associate large OI increases with aggressive positioning in derivatives markets. In this case, the data points to a short squeeze as the mechanism behind the price move.

A short squeeze occurs when rising prices force traders holding short positions to close them. That closing process generates additional buying pressure, pushing prices even higher.

However, this type of rally lacks the organic demand needed to sustain the move. Without spot buyers absorbing supply, the price eventually loses momentum.

The ETF outflow figure of $1.845 billion on April 22 adds weight to that reading. Institutional money was not flowing into spot Bitcoin products during the rally.

Instead, capital was moving out of those vehicles at a notable pace. That divergence between futures activity and spot flows is a critical detail in understanding the move.

Alemán’s analysis concludes that the rally was led by derivatives, not by underlying spot demand. The timing of the ETF outflows, occurring near the peak of the move, further supports that conclusion. The combination of futures-driven price action and simultaneous spot selling created a fragile top.

Open Interest Decline After April 22 Confirmed Position Unwinding

After Bitcoin peaked, Open Interest began to fall sharply in the sessions that followed. OI dropped from $27.56 billion on April 22 to $26.10 billion on April 23, a reduction of $1.46 billion.

It then fell again to $25.26 billion by April 24, shedding another $839 million. Price followed that decline, moving toward the $77,400 area.

By April 25, OI had only decreased by around $230 million, and price movement was minimal. The largest price drops matched the periods of heaviest futures unwinding. That correlation reinforces the view that derivatives positioning was central to the move in both directions.

The dual pressure of spot ETF outflows and futures position closures explains why Bitcoin failed to hold above $79,447. Neither force was acting in isolation. Together, they removed the buying support needed to sustain the rally.

The data available through April 25 remained incomplete, though the trend was already clear. The sequence, futures expansion, short squeeze, ETF outflows, then OI contraction, tells a consistent story. Bitcoin’s April rally was a derivatives event, not a spot-driven breakout.

Coinbase (COIN) has quietly crossed a threshold that Wall Street would recognize immediately: it has become, by its own definition, the only full-service prime brokerage in crypto.

John D’Agostino, head of strategy at Coinbase Institutional, said the definition of a prime broker still follows a familiar Wall Street checklist: trading, custody, financing, derivatives and cross-margining. In crypto, he added, there’s an extra layer, staking. “If you can do all of those at scale, you’re a prime,” he said.

In equities and fixed income, only a handful of firms, Goldman Sachs (GS), Morgan Stanley (MS) and Bank of America (BAC), truly qualify as full-service primes, D’Agostino said. Smaller brokers can support funds, but they don’t offer the full stack. “A $100 million hedge fund isn’t getting everything from the top tier. They’re piecing it together,” he said. “The big primes do everything.”

Crypto, until recently, worked the same way, just more fragmented. Funds stitched together custody from one provider, derivatives from another, financing elsewhere. “You can synthetically replicate a prime by patching services together,” D’Agostino said. “But Coinbase is the only one doing all of it natively.”

Coinbase is the largest U.S.-based cryptocurrency exchange and a major provider of infrastructure for institutional investors, offering trading, custody and financing services through its Coinbase Institutional unit.

Its flagship platform, Coinbase Prime, bundles these functions into a single system, allowing hedge funds and asset managers to trade, store and finance digital assets under one roof. Prime holds over $350 billion in assets under custody, about 12% of the total crypto market cap, and serves as custodian for more than 80% of U.S. bitcoin and ether ETF assets.

The firm has become a key bridge between traditional finance and crypto markets, serving as custodian for a significant share of U.S. bitcoin BTC$78,117.67 and ether (ETH) exchange-traded fund (ETF) assets and operating under a growing regulatory framework, including oversight from New York regulators

Crypto prime brokers provide institutional clients with a bundled suite of services designed to mirror traditional offerings in markets like equities and FX. They help funds manage counterparty risk and access liquidity across fragmented venues. Prominent players include Coinbase Prime, Galaxy Digital (GLXY), FalconX and Anchorage Digital.

Cross-margining

The final piece fell into place in March with the rollout of cross-margining between spot and derivatives positions, allowing market makers and institutional traders to reduce capital requirements by as much as 10% to 20%. “That was the last pillar,” D’Agostino said. “Now we’re a prime by any standard, substitute crypto for any asset class.”

Coinbase’s institutional platform processes roughly $236 billion in quarterly trading volume and supports more than 470 assets across 20-plus blockchains.

Beyond trading and custody, Coinbase runs a $1 billion lending book and what D’Agostino describes as the industry’s largest listed derivatives footprint through its Deribit integration. Its staking business spans 10 to 20 tokens at institutional scale, including dedicated products through Coinbase Asset Management.

“Those are the core components. There are firms doing well in custody, others in derivatives, others in lending,” he said. “No one is solving all of those problems in one place.”

That gap has persisted in part because of crypto’s relative size. At roughly 3% to 5% of global equities and fixed income markets, it remains too small for major banks to fully commit.

D’Agostino instead expects banks and incumbents to partner. “Buy, build or rent,” he said. “Banks will rent. It’s cheaper and smarter to rent the best brand than build a so-so version.”

Longer term, that calculus could change if crypto grows to 20% or 30% of global markets. “Then you’ll see full-scale competition,” D’Agostino said. “But that’s years away.”

For now, the bigger threat isn’t Wall Street, it’s startups. “I’m less concerned about JPMorgan than I am about the next Brian Armstrong,” he added.

Read more: Coinbase, Bybit said to be working together on tokenization, custody and distribution of U.S. stocks

The US CLARITY Act, a cornerstone proposal aimed at delivering regulatory clarity for the crypto industry, appears poised for finalization in May, according to Galaxy Digital CEO Mike Novogratz. In a SkyBridge Capital podcast with Anthony Scaramucci, Novogratz forecast that the bill would move to the committee in the first week of May and could reach the president’s desk for signing as soon as June, signaling a potential climate shift for US crypto policy. He stressed that bipartisan consensus is crucial for sustaining American innovation in finance and technology.

The forecast comes amid a thinner-than-expected week for crypto legislation in Congress, as the Senate Banking Committee did not schedule a markup hearing by Friday—crucial momentum that markets had anticipated. Even as the timetable remains uncertain, Novogratz argued that the CLARITY Act would unlock new pathways for institutional participation, including tokenizing and selling major U.S. entities to global investors.

Key takeaways

• May emergence: Galaxy Digital’s Mike Novogratz forecasts the CLARITY Act’s finalization in May, with a potential June signing, hinging on committee action and bipartisan alignment.
• Tokenization promise: The bill is framed as enabling the tokenization of large institutions—an idea Novogratz says could broaden access to global markets for US-based assets.
• Current friction: The Senate Banking Committee did not hold a markup as expected, underscoring ongoing negotiations and political headwinds that could affect timing.
• Backstop from lawmakers: Senator Cynthia Lummis warned that the window to pass the CLARITY Act may be narrowing, framing it as a critical juncture for America’s financial future.

The CLARITY Act in a moment of regulatory tension

Novogratz’ outlook reflects a broader market longing for clarity after years of regulatory ambiguity that contributed to some crypto firms relocating operations abroad during the prior administration. He argued that the CLARITY Act’s passage would be a watershed, not only for crypto markets but for broader innovation in the United States. The explicit prospect of tokenizing globally accessible corporate assets—such as SpaceX and Google—could redefine how capital markets allocate risk and reward across borders.

“This phone with a crypto wallet is going to be the way the kid in Bhutan or Batswana or Bolivia or Paraguay, you name it, is participating in the American economy.”

The notion that personal devices could serve as gateways to a broad, tokenized financial system underscores the Act’s potential reach. Still, the road to passage has been far from smooth. The bill previously cleared the House in July 2025 with bipartisan support, raising expectations that a broader consensus might now carry it through Senate deliberations. Yet, disputes over how stablecoins interact with traditional banking—particularly whether yields from stablecoins could erode banks’ competitiveness—have kept the legislation in a gridlock that many market participants find frustrating.

Industry sentiment: timelines and odds

Industry insiders remain divided on the likelihood of timely passage. Galaxy Digital chief of firmwide research Alex Thorn suggested in a social post that the current odds of the CLARITY Act becoming law in 2026 were around 50%. Thorn noted in accompanying commentary that the Senate Banking, Housing, and Urban Affairs Committee was expected to set a markup hearing in the near term, a signal that momentum could resume, though a concrete timetable did not materialize as anticipated. He cautioned that if markup slips past mid-May, the odds of passage could deteriorate appreciably.

The regulatory backdrop remains the primary overhang for the sector. Proponents argue that clear, durable rules would unlock capital access and catalyze domestic innovation, while critics warn of potential risk gaps if the framework does not fully address the evolving realities of digital assets, including stablecoins and tokenized assets. The tension between banking interests and crypto advocates has been a persistent feature of the debate, complicating simple pass/fail predictions for the CLARITY Act.

As part of the broader narrative, investors and builders are watching how the bill’s provisions would interact with existing financial infrastructure. A successful enactment could potentially redraw the map for institutional participation in digital assets and open new funding channels for innovative projects that have faced regulatory hurdles in the current environment. The House’s prior passage in 2025 offered a signal that lawmakers recognize the strategic importance of crypto regulation—yet the Senate pace and its negotiations have so far determined the pace of any final approval.

What changes, what remains uncertain, and what to watch next

The core shift proposed by the CLARITY Act is regulatory clarity—reducing the ambiguity that has long stoked caution among banks, insurers, and asset managers contemplating digital-asset exposure. If enacted, the law could pave the way for more standardized treatment of digital securities, stablecoins, and tokenized equities, while clarifying enforcement expectations for issuers and platforms. That kind of clarity can have a tangible impact on capital formation, product development, and the strategic decisions of large tech and industrial players contemplating tokenized offerings.

At the same time, several critical uncertainties remain. The precise legislative language, the final stance of key committee chairs, and the political dynamics across both parties will shape whether the bill can clear the Senate in 2026. The parallel discussions around stablecoin regulation and the accounting of tokenized assets will also influence how aggressively firms pursue tokenized products once a framework is in place. For investors, the takeaway is not a guaranteed breakthrough but the potential for a meaningful policy inflection that could reorient risk, funding, and growth trajectories in the crypto economy.

Meanwhile, proponents emphasize that the clock is not just about passing a single bill but about signaling to the global market that the United States remains open to responsible innovation. The House’s July 2025 vote underscores a legislative appetite for a credible regulatory path, yet the Senate’s pace underscores how political, regulatory, and industry fault lines can extend timelines. Those dynamics will be crucial as the spring and early summer sessions unfold and the crypto policy discourse moves from committee rooms to a broader national conversation.

What readers should watch next is how the Senate addresses the markup process and whether a bipartisan framework can crystallize around the act’s provisions. If May brings a committee referral followed by timely floor action, the CLARITY Act could emerge as a defining moment for crypto regulation in the United States—one that not only clarifies the rules of the road for digital assets but also shapes the market’s willingness to embrace tokenized capital in the years ahead.

Source tracking and attribution: Statements about timing and committee action reflect remarks attributed to Mike Novogratz on a SkyBridge Capital podcast with Anthony Scaramucci, and the broader timeline context comes from coverage surrounding the bill’s progress, including Lummis’ warning about the window to pass the CLARITY Act and Galaxy Digital’s commentary on the likelihood of a 2026 passage. Past House passage and related industry chatter provide additional context for the current momentum and the anticipated debate in the Senate.

Key Takeaways

• Jane Street generated $39.6B in trading revenue with only 3,500 employees in 2025.
• Legal scrutiny in India and the U.S. challenges Jane Street’s trading practices.
• Crypto market faces stricter transparency and compliance standards

Jane Street Outpaces JPMorgan in Trading Revenue

Jane Street recorded a remarkable $39.6 billion in trading revenue in 2025, surpassing JPMorgan’s $35.8 billion despite operating with only 3,500 employees. By comparison, JPMorgan employs more than 316,000 people globally. The contrast highlights one of the largest productivity gaps in modern finance, with each Jane Street employee generating an estimated $11 million in revenue.

The firm operates as a proprietary trading company, meaning it trades using its own capital rather than managing client funds. Jane Street has built its reputation through market-making activities, particularly in exchange-traded funds and options markets. Reports suggest that 87% of its $662 billion portfolio is tied to options, positioning the firm to benefit heavily from market volatility and rapid trading opportunities.

Market-Making Strategy Raises Regulatory Questions

Jane Street’s success has also attracted growing regulatory attention. In India, the Securities and Exchange Board of India (SEBI) accused the company of manipulating bank stocks and index options during expiry sessions. Authorities reportedly impounded $567 million linked to the alleged activity.

Beyond India, scrutiny has expanded into the crypto sector. Jane Street often acts as a liquidity provider and market maker, roles that give firms visibility into order flow and market behavior. Regulators are increasingly examining whether these informational advantages create unfair trading conditions or allow firms to benefit from early market signals.

Terraform Lawsuit Intensifies Legal Pressure

In the United States, Jane Street is facing allegations tied to the collapse of Terraform Labs and the Terra-Luna ecosystem. A federal complaint claims the firm used non-public information to avoid substantial losses during the stablecoin’s breakdown.

Central to the lawsuit is a narrow 10-minute period in May 2022. Terraform Labs reportedly removed $150 million in TerraUSD liquidity from Curve’s 3pool without public notice. Minutes later, a wallet linked to Jane Street withdrew $85 million, fueling allegations that the company acted on privileged information.

What Comes Next for Crypto Market Makers

The next several months could determine how regulators approach proprietary trading firms in both traditional and crypto markets. A favorable legal outcome for Jane Street may strengthen the argument that firms simply react to public blockchain activity. However, stricter rulings could reshape compliance standards across the industry.

Crypto market makers are already tightening internal controls as regulators focus more closely on liquidity management, insider communication, and order-flow transparency. These developments may mark a turning point for how high-frequency trading firms operate in digital asset markets.

🚨 A FIRM WITH 3,500 EMPLOYEES MADE $39.6 BILLION LAST YEAR AND MOST OF IT CAME FROM MARKETS THEY ARE ALSO ACCUSED OF MANIPULATING : JANE STREET

And they just had their best year ever while facing a market manipulation fine in India and an insider trading lawsuit in the US.… pic.twitter.com/x9CkE2SzDg

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— Bull Theory (@BullTheoryio) April 25, 2026