The Bitcoin options market shifts as traders watch BTC turn bearish

The key take-aways

• The growing demand for BTC miner deposits and put options highlights the increasing caution of traders, despite the price stability near $108,000.

• The Bitwise analysts argue that the market corrections are often preceded by a deep drop in sentiment. “contrarian buying window”.

BitcoinBTC() dropped to $107 600 on Thursday. This prompted traders to wonder if Friday’s crash was a sign of the end to the bull market that reached its peak on October 6. Traders are on alert after a warning in the Bitcoin option market. This is especially true amid increasing outflows of miners, which have tested the level of support at $108,000.

Bitcoin delta skew is now above 10%. Professional traders are buying put (sell), a bearish sign. In neutral conditions, the indicator ranges from -6% to +6%. It is important to note that the skew of this indicator has been worsening ever since Friday. That suggests traders are becoming more sceptical about Bitcoin’s bullish momentum.

The market’s sentiment has been affected by US President Donald Trump’s announcement that the US-China trade war is still ongoing. Trump has warned that he will further restrict the trade between China and US following China’s suspension of US soya purchases. according Yahoo Finance. The uncertainty around US economic data during the government shutdown is another factor that adds pressure.

Deribit saw a surge in demand for strategies to protect against a fall, as the trading volume for call and put options was 50% higher than that of options. This is indicating heightened market tension. The indicator reached its highest value in 30 days. The average cryptocurrency trader is optimistic. Therefore, a neutral ratio of put to call tends at around -20%. This favors the option called.

Bitcoin derivatives only reflect the worsening US economics

As gold reached a new record on Thursday, investors’ sentiments have shifted. Demand for short-term US government bonds also spiked, even as two Federal Reserve Governors signaled further interest rate cuts in October — a move that typically reduces the appeal of fixed-income investments.

Investors are now willing to settle for lower yields in return for the safety of government-backed securities. Gold has risen to $4300, up by 23% from September. This puts the gold reserves of central banks above those of US Treasurys. according Reuters.

Despite positive developments in the tech sector, including chipmaker TSMC’s (TSM) upgraded 2025 outlook and strong quarterly results from Bank of America and Morgan Stanley, the S&P 500 fell 0.9% on Thursday. Dow Jones US Select Regional Banks Index fell 4.4% following two financial companies reporting losses on the private credit market. according Financial Times

Related: SEC chair: US is 10 years behind on crypto, fixing this is ‘job one’

Concern has also been raised about the movements of addresses linked to Bitcoin miners. Data CryptoQuant reports that in the seven-day period ending July 1, miners had deposited more than $5.5 billion (or 51,000 BTC) at exchanges. This is the highest outflow of bitcoins since July. Analysis noted that this behavior usually precedes price declines, since miners are historically among Bitcoin’s biggest holders.

Bitwise analysts pointed out that the extreme drop in sentiment has often been experienced by Bitcoin traders. “marked favorable entry points,” Add that “the recent correction was driven largely by external factors.” Bitwise head of research André Dragosch added that Friday’s liquidation event has set the stage for a “contrarian buying window.”

Bitcoin could still fall further, however, the increase in put option demand should not be interpreted as an indication of a sustained downward trend, because external factors may have made traders less risk averse.

The article does not provide legal advice or investment recommendations and it is intended for informational purposes only. These are solely the opinions, views, and thoughts of the author and may not reflect the opinions and views of Cointelegraph.