BTC Options Change as Traders Monitor BTC Turning Bearish

Takeaways from the conference:

• The increasing demand for BTC mining deposits and put-options highlights the growing caution of traders in spite of price resistance near $108,000.

• The Bitwise analysts argue that slumps in the market’s sentiment are often followed by rebounds. They frame this correction as an a “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. A warning in the Bitcoin options market sent traders into a frenzy, as the outflow of miners increased. They were testing the level of support at $108,000.

Bitcoin’s options delta skew has risen above 10%. This shows that traders pay a premium to sell put options. This indicator is usually between -6 and +6 under neutral conditions. It is important to note that the skew of this indicator has gotten worse since last Friday. This indicates traders’ growing doubts about Bitcoins positive momentum.

US President Donald Trump’s confirmation of the continuation of the US-China trade war has also affected market sentiment. Trump has threatened further trade restrictions with China after its suspension of US Soybean purchases. according Yahoo Finance. The uncertainty around US economic data during the government shutdown is another factor that adds pressure.

Deribit’s demand for protection against the downside surged Thursday, when trading volumes of put options outnumbered call options 50%. It was a sign that market pressure had increased. This indicator has reached its highest point in more than 30 days. A neutral reading of the put-to call ratio is around -20% for cryptocurrency traders, which favors calls.

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.

The yields of the US 2-year Treasury fell to the lowest levels in over three years. This shows that investors will accept lower returns for government-backed assets. Gold has risen to $4300, a 23% increase since 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 dropped 4.4% as two banks reported losses on private-credit markets. 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’s analysis shows that over the last seven days miners have deposited over $5 billion worth of BTC on exchanges, which is the biggest outflow since the beginning of July. This behavior is often a precursor to price drops, because miners historically have been the largest Bitcoin holders.

Bitwise analysts noted that while the Bitcoin options market has warned of a possible further decline in Bitcoin sentiment, extreme falls have occurred before. “marked favorable entry points,” Also, 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 information contained in this article is meant to provide general knowledge and not as a legal or investment advisory. This article is solely for informational purposes. It does not represent or reflect Cointelegraph’s views.