March 2026

After February's sustained deleveraging - an event that compressed activity to the lowest in our history - derivatives markets transitioned into a regime more consistent with the conditions the system is designed to engage with. Leverage rebuilt. Positioning reconstituted. The system scaled exposure accordingly.

01 / Performance

The strategy returned +5.47% net during the reporting period with zero drawdown. All 26 active trading days closed positive.

Returns were distributed throughout the month with a gradual acceleration as conditions improved. Activity recovered substantially from February but remained below January's pace - consistent with the rebuilding phase of leveraged positioning across our venue set.

What interested me about March was the progression. The first week produced modest returns as the system began re-engaging. By mid-month, as open interest rebuilt and short positioning became crowded, the opportunity density increased. The system responded proportionally. No manual intervention was required.

All returns are reported net of commissions and funding costs.

02 / Market Structure

March opened with Bitcoin near $66,000 and the Fear & Greed index still in extreme fear territory - a reading that would persist for 59 consecutive days by month end, the longest such streak since FTX.

Despite this sentiment backdrop, the underlying derivatives structure shifted meaningfully.

BTC futures open interest rebuilt to approximately $112 billion through the month, but the composition of that positioning was heavily short-biased. Funding rates remained flat to negative across major venues. The bulk of new contracts being opened were shorts - traders positioning for continuation of the February decline that never came.

Positioning became increasingly concentrated as bearish sentiment persisted despite improving market structure. These conditions created recurring dislocations across derivatives markets throughout the month.

The clearest example occurred on March 2, when a short-covering event drove Bitcoin approximately 5% higher in a single session. The Fed held rates at 3.5%-3.75% at its March 18 meeting but raised its 2026 inflation forecast to 2.7%, triggering a sharp move from $74,000 to approximately $71,000 and a $129 million single-day ETF outflow.

Institutional flows turned net positive for the first time in 2026. Spot Bitcoin ETFs recorded $1.32 billion in net inflows for the month - snapping four consecutive months of outflows. This mattered not because of directional signal, but because returning inflows stabilize the underlying spot market, allowing dislocations to resolve more cleanly.

One feature that stood out during March was the speed at which market participants re-established directional conviction following February's liquidation event. Historically, major deleveraging episodes are followed by periods of reduced participation. Instead, positioning rebuilt rapidly and became increasingly one-sided as the month progressed. From our perspective, this willingness to reintroduce leverage shortly after a significant market dislocation remains one of the defining characteristics of crypto derivatives markets.

03 / Risk & Execution

Maximum drawdown was zero throughout the period. Leverage remained conservative. Risk gating and exposure controls operated within expected parameters.

The contrast with February is worth noting. Same system, same parameters, same risk controls - but activity increased roughly fivefold. The environment determines deployment. The system adapts to conditions without any change to its underlying logic.

04 / Looking Ahead

March suggests that the conditions absent during February were largely restored. The opportunity set expanded accordingly, and the strategy responded as designed.

Whether those conditions persist is uncertain. What remains unchanged is the system's process for evaluating and engaging with them.

The system continues to operate within all defined parameters.