Bitcoin BTC$67,813.39 is struggling to build any upward momentum, even as the key panic gauge pulls back from its early-month high and hints at renewed stability.

Bitcoin's 30-day implied volatility, the fear or panic gauge, which reflects investors' expectations for price swings over 4 weeks, has dropped to an annualised 52%, according to data source Volmex. The decline has reversed the early-month spike, which saw the index rise from roughly 48% to nearly 100% as bitcoin crashed to nearly $60,000.

The receding volatility suggests that panic has ebbed and that investors are no longer chasing options or hedging instruments as frantically as during the crash.

Options are derivative contracts offering insurance against price swings. A call option allows you to profit from upside price volatility in BTC, while a put option protects against price slides. Demand for options influences implied volatility.

"Implied volatility has dropped, and deleveraging is running out of steam, analysts at Bitfinex said in an email to CoinDesk, noting the newfound stability and ebbing of panic.

Still, bitcoin's price remains under pressure, trading just under $68,000 at press time, a 1.2% drop over the past 24 hours, per CoinDesk data. The early-month sell-off fizzled near $60,000 on Feb. 6, sparking a recovery, but prices haven't sustainably moved above $70,000 since.

That's telling of weak demand.

"Funding rates have yet to show appetite for aggressive re-leveraging and derivatives markets support the view of a stabilization rather than renewed buying," Bitfinex analysts explained.

Perpetual funding rates are periodic payments exchanged between long and short traders in crypto perpetual futures contracts to keep the contract price anchored to the spot price. A positive rate implies that longs (buyers betting on price rises) pay shorts (sellers betting on drops), signaling more bullish positioning in the market. A negative rate suggests a bias for short positions.

While the implied volatility has receded sharply, funding rates in BTC perpetuals remain just above zero, a sign of mild bullish leanings among traders, but nothing aggressive yet.

Institutional appetite hasn't been great either. The U.S.-listed spot bitcoin exchange-traded funds have registered a net outflow of $677.98 million this month, extending a three-month streak of redemptions, according to data source SoSoValue.

Macro offers hope

Battered bulls can pin their hopes on the dwindling U.S. inflation and lower real yields, which could offer a tailwind to risk assets and non-yielding assets like bitcoin.

Data released last week showed the consumer price index (CPI) slowed to 2.4% year-on-year in January from 2.7% in December, strengthening hopes for at least two 25 basis-point rate cuts by the Fed this year.

The real or inflation-adjusted yield on the U.S. 10-year Treasury note fell to 1.8%, the lowest since Dec. 1. A decline in real yield typically prompts investors to increase exposure to assets like bitcoin.

"Lower real yields reduce the relative carry disadvantage of non-yielding assets such as Bitcoin, while a softer dollar supports global liquidity conditions," Bitfinex analysts noted.