Risk aversion is rising in the Bitcoin options market. Deribit has recently seen a surge in short-term and near-month put option buying, with some contracts' strike prices falling to as low as $52,000, indicating that traders are preparing for a potential further pullback in the coming weeks.
Short-term bearish contracts saw a surge in trading volume.
According to data tracked by Laevitas, there has been significant buying interest in Deribit put options with expiration dates between June 22 and July 31 over the past 24 to 48 hours, with most of these being out-of-the-money options. These types of contracts are typically used to bet on a rapid price decline or to protect existing spot positions.
- June 22, $61,500 put options, 337 contracts
- On July 3rd, 116 put options worth $60,000 and 380 put options worth $55,000 each were issued.
- 540 put options worth $55,000 each on July 10th, and 314 put options worth $52,000 each on July 31st.
Put options give the buyer the right to sell Bitcoin at a predetermined price in the future. The protective value of these contracts increases when the spot price falls below the strike price, and they are often considered an insurance tool during market downturns.
The market is facing increasing pressure factors.
This surge in bearish betting is driven by a combination of risk factors. The report notes that the Federal Reserve's tightening stance is supporting a stronger dollar, while continued outflows from Bitcoin spot ETFs are weakening market absorption capacity.
Meanwhile, Strategy, a publicly traded company holding a significant amount of Bitcoin, is also facing increasing pressure. Its preferred stock, STRC, has fallen below its $100 par value and hit a record low, making it more difficult for the company to continue increasing its Bitcoin holdings based on its capital structure.
Arca's Chief Investment Officer, Jeff Dorman, stated on X that Strategy faces a dilemma: either sell a large amount of BTC and MSTR to help STRC return to near parity, or continue to bear the pressure of a synchronized weakening of all parts of its capital structure.
Bitcoin retreats from weekly highs
According to CoinDesk data, Bitcoin was trading at approximately $62,400 when the report was published, down 0.8% from midnight UTC that day. Earlier this week, Bitcoin had approached $67,000 before falling back.
Looking at the options distribution, the market is not only trading short-term fluctuations but also pricing in a deeper drop. The concentrated buying around $55,000 and $52,000 indicates that some traders have moved their stop-loss levels even lower.
