BTC Futures Slide Back to Post-FTX Levels of Backwardation, Suggesting a Bottom May Be Forming

The CME bitcoin annualized basis has dropped to -2.35%, marking the sharpest period of backwardation since the turmoil surrounding the FTX collapse in November 2022, when the basis briefly neared -50%, according to data from Velo.

In a backwardated market, shorter-dated bitcoin futures trade at higher prices than longer-dated ones, indicating that traders expect weaker bitcoin prices in the months ahead. This downward-sloping futures curve is uncommon for bitcoin, which typically trades in contango as futures carry a premium driven by leverage costs and consistent demand for forward exposure.

Backwardation first reappeared around Nov. 19, just ahead of bitcoin’s local trough near $80,000 on Nov. 21. The recent market pullback has forced a significant unwinding of leverage, with long futures positions being closed and institutional players reducing risk.

Historically, backwardation has surfaced during moments of market stress or forced selling. Previous episodes in November 2022, March 2023, August 2023, and now November 2025 have often coincided with major or local market lows.

However, backwardation should not be interpreted as a definitive bullish reversal signal. Unlike physical commodities such as crude oil — where backwardation often signals tightening supply — CME bitcoin futures are cash-settled and widely used by institutions implementing basis strategies. As a result, the curve can fall further into negative territory without implying strong demand in the spot market.

Instead, the move reflects subdued forward expectations and caution among market participants. While much of the excess leverage has already washed out, further deterioration is possible if risk sentiment remains fragile. At the same time, this setup has historically appeared near turning points once forced sellers are largely cleared out.

Bitcoin is now entering a zone where heightened risk and potential opportunity intersect, echoing patterns seen during past market resets.