The Bitcoin options market shifts as traders watch BTC turn bearish

The key takeaways

• Despite the fact that prices are still holding steady at around $108,000, traders have become more cautious as they demand put options for BTC and deposit miner BTC.

• The Bitwise analysts argue that deep corrections in the market often precede rebounding, framing it 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. It’s a warning sign in the Bitcoin option market that has traders on edge.

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. The skew is worsening since Friday. This suggests that traders have become more skeptical about Bitcoin’s upward 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’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 pressures were increasing. 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

Gold’s all-time record high was not the only one affected by a shift in investor sentiment. 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. While gold rose to $4,300 in September, up 23%, the central bank’s gold reserves now exceed their US Treasury holdings. 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 The Financial Times

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

The movement of Bitcoin addresses that are linked with bitcoin miners has also caused concern. 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. This behavior is often a precursor to price drops, because miners historically have been the largest Bitcoin holders.

Bitwise analysts pointed out that the extreme drop in sentiment has often been experienced by Bitcoin traders. “marked favorable entry points,” Add to 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.

This is not intended as legal or financial advice. These are solely the opinions, views and thoughts of the author and may not reflect the opinions and views of Cointelegraph.