The Bitcoin options market increases pressure on investors

After Bitcoin's price fell to 107,600 USD on Friday, investors questioned whether the sudden collapse signaled the end of the bullish trend. A warning signal from the Bitcoin options market has made investors' sentiment anxious, especially as the outflow from miners increases, testing the strength of the support level at 108,000 USD.

The delta skew of the 30-day Bitcoin options at Derbit (put options-call options) | Source: laevitas.chThe delta skew of Bitcoin options has exceeded 10%, indicating that professional investors are willing to pay a premium for put options — a typical sign of bearish sentiment. Under neutral conditions, this index usually fluctuates between -6% and +6%. Notably, this skew has worsened since Friday, reflecting growing skepticism about Bitcoin's bullish momentum.

The confirmation from U.S. President Donald Trump that the trade war with China is still ongoing has also negatively impacted market sentiment. Trump has threatened to impose additional trade restrictions on China after the country stopped buying soybeans from the U.S. Furthermore, the uncertainty surrounding U.S. economic data amid the government shutdown is also creating pressure on the market.

Bitcoin options volume on Deribit | Source: laevitas.chThe demand for bearish hedging strategies on the Deribit exchange surged on Thursday, as the trading volume for put options outpaced call options by 50%, a sign that market tensions are increasing. This index reached its highest level in over 30 days. Cryptocurrency investors are typically optimistic, thus the neutral index for the ratio of put to call options usually hovers around -20%, leaning towards call options.

Macroeconomic Analysis and Its Impact on the Bitcoin Market

Bitcoin is not the only market affected by changes in investor sentiment; this is also reflected in gold prices reaching an all-time high on Thursday. Demand for short-term U.S. government bonds has also surged, even as two Federal Reserve governors have signaled the possibility of further rate cuts in October — a move that typically reduces the appeal of fixed-income investments.

The yield on the 2-year U.S. Treasury bond | Source: TradingViewThe yield on the 2-year U.S. Treasury bond has fallen to its lowest level in over three years, indicating that investors are willing to accept lower yields in exchange for safety from government-backed assets. At the same time, the price of gold has risen to 4,300 USD, up 23% since September, pushing the gold reserves of central banks above the total holdings of U.S. Treasury bonds.

Despite positive developments in the technology sector, including the upgrade prospects for 2025 from chipmaker TSMC (TSM) and strong quarterly results from Bank of America and Morgan Stanley, the S&P 500 index still fell 0.9% on Thursday. The Dow Jones US Select Regional Banks index dropped 4.4% after two financial companies reported losses in the private credit market, according to the Financial Times.

The movement from addresses related to Bitcoin miners has also raised concerns. Data from CryptoQuant shows that miners have transferred 51,000 BTC ( worth over 5.5 billion USD ) to exchanges in the past seven days, marking the largest outflow since July. Analysis indicates that this behavior often occurs before Bitcoin prices weaken, as miners have long been the largest holders of Bitcoin.

Despite warnings from the Bitcoin options market indicating fear of a potential correction, analysts at Bitwise believe that extreme declines in sentiment often “mark favorable entry points,” while also emphasizing that “the recent correction has primarily been driven by external factors.” André Dragosch, the head of research at Bitwise, stated that the liquidation event on Friday created an opportunity for a “contrarian buying window.”

The potential for further decline in Bitcoin may still occur, but the increase in demand for put options does not necessarily reflect an enduring bearish momentum; it may simply be due to external factors making investors more cautious.