Key takeaways:
Rising demand for put options and miner BTC deposits highlights growing caution among traders despite price resilience near $108,000.
Analysts at Bitwise argue that deep drops in market sentiment often precede rebounds, framing the correction as a “contrarian buying window”.
Bitcoin (BTC) fell to $107,600 on Thursday, prompting traders to question whether Friday’s flash crash signaled the end of the bull run that peaked at an all-time high on Oct. 6. A warning signal in Bitcoin’s options market has put traders on edge, especially amid rising miner outflows, testing the strength of the $108,000 support level.
Bitcoin 30-day options delta skew at Derbit (put-call). Source: laevitas.ch
The Bitcoin options delta skew climbed above 10%, showing that professional traders are paying a premium for put (sell) options, a sign typical of bearish sentiment. Under neutral conditions, this indicator usually ranges between -6% and +6%. More importantly, the skew has worsened since Friday, suggesting that traders are growing more doubtful about Bitcoin’s bullish momentum.
US President Donald Trump’s confirmation that the trade war with China remains ongoing has also weighed on market sentiment. Trump has threatened to further restrict trade with China following its suspension of US soybean purchases, according to Yahoo Finance. Another factor adding pressure is the uncertainty surrounding US economic data amid the ongoing government shutdown.
Bitcoin options volumes put-to-call at Deribit. Source: laevitas.ch
Demand for downside protection strategies on Deribit surged on Thursday as trading volumes for put options exceeded call options by 50%, a sign of mounting market stress. The indicator climbed to its highest level in over 30 days. Cryptocurrency traders are typically optimistic, so a neutral reading for the put-to-call ratio tends to sit around -20%, favoring call options.
Bitcoin derivatives merely reflect the worsening US macroeconomics
Bitcoin wasn’t the only market affected by investors’ shift in sentiment, as seen in gold’s new all-time high on Thursday. Demand for short-term US government…
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