Bitcoin’s CME annualized basis fell to -2.35%, its largest backwardation since the extreme upheaval 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 earlier trade at a higher price than contracts that expire later. In other words, the market prices bitcoin in the future lower than the current or near-term price. This creates a sloping forward curve and signals that traders expect prices to decline over time.
This structure is generally unusual in Bitcoin, as Bitcoin futures almost always trade at a premium, known as contango, reflecting the cost of leverage and high demand for futures exposure.
The recent move into backwardation first manifested itself around November 19, just two days before bitcoin bottomed around $80,000 on November 21. During this recent correction, considerable leverage was eliminated from the system as traders unwound long futures contracts and institutions reduced their exposure.
Backwardation has historically appeared in times of stress or forced risk reduction, and previous episodes in November 2022, March 2023, August 2023, and now November 2025 were closely aligned with major or local market lows.
However, a backwardation does not automatically imply a bullish inflection. As previous CoinDesk research has pointed out, bitcoin is not comparable to physical commodities like oil, where backwardation reflects tight supply. CME futures are cash-settled, widely used by institutions carrying out basic trading, and can move further into negative territory.
From this perspective, backwardation represents a conservative assessment of futures prices and lower expectations rather than a strength in short-term spot demand.
Much of the debt has already evaporated, but the situation can still deteriorate if risk appetite deteriorates further. At the same time, it is this same structure that has repeatedly marked turning points once the forced sellers have exhausted themselves. Bitcoin is therefore entering a zone where danger and opportunity have historically emerged.
