The CME bitcoin annualised basis has fallen to -2.35% its deepest backwardation since the extreme dislocations of the FTX collapse in November 2022, when the basis briefly approached -50%, according to Velo data.

Backwardation describes a futures curve in which contracts that expire sooner trade at a higher price than contracts that expire later. In other words, the market is pricing bitcoin in the future at a lower level than the current or near term price. This creates a downward sloping futures curve and signals that traders expect weaker prices as time passes.

This structure is typically unusual in bitcoin because bitcoin futures almost always trade at a premium, known as contango, reflecting the cost of leverage and strong demand for forward exposure.

The move recently into backwardation first flashed around Nov. 19, just two days before bitcoin bottomed around $80,000 on Nov. 21. In this recent correction a considerable amount of leverage has been flushed from the system, with traders unwinding long futures and institutions reducing exposure.

Backwardation has historically appeared at moments of stress or forced de-risking, and previous episodes in November 2022, March 2023, August 2023 and now November 2025 aligned closely with major or local market lows.

However, backwardation does not automatically imply a bullish inflection. As highlighted in earlier CoinDesk research, bitcoin is not comparable to physical commodities like oil where backwardation reflects tight supply. CME futures are cash settled, heavily used by institutions running basis trades, and can slip deeper into negative territory.

In this view, backwardation represents cautious forward pricing and weaker expectations rather than near term spot demand strength.

A large portion of leverage has already evaporated but conditions can always worsen if risk appetite deteriorates further. At the same time, this is the same structure that has repeatedly marked turning points once forced sellers exhaust themselves. Bitcoin is therefore entering a zone where both danger and opportunity have historically emerged.