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Main takeaways:
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The rise in demand for put options and BTC miners’ deposits highlights growing caution among traders despite price resistance near $108,000.
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Bitwise analysts argue that deep drops in market sentiment often precede rebounds, framing the correction as a “contrarian buying window.”
Bitcoin (BTC) fell to $107,600 on Thursday, prompting traders to wonder if Friday’s flash crash signaled the end of the bull run that hit an all-time high on Oct. 6. A warning signal in the Bitcoin options market has put traders, especially in the middle of the increasing flows of miners, testing the strength of the $108,000 support.
Bitcoin options delta skew has risen above 10%, showing that professional traders pay a premium for put (sell) options, a typical sign of bearish sentiment. In neutral conditions, this indicator usually varies between -6% and +6%. More importantly, the skew has worsened since Friday, suggesting that traders have more doubts about Bitcoin’s bullish momentum.
The confirmation of the President of the United States, Donald Trump, that the trade war with China remains ongoing, also weighed on the market sentiment. Trump has threatened to further limit trade with China after his suspension of US soybean purchases, according to at Yahoo Finance. Another factor adding to the pressure is the uncertainty surrounding US economic data amid the ongoing government shutdown.
Demand for hedging strategies on Deribit increased on Thursday, as trading volumes for put options exceeded call options by 50%, a sign of growing market stress. The indicator rose to its highest level in more than 30 days. Cryptocurrency traders are typically bullish, so a neutral reading for the put-to-call ratio tends to sit around -20%, favoring call options.
Bitcoin derivatives only reflect the deterioration of the US macro economy
Bitcoin was not the only market affected by the change in investor sentiment, as seen in gold’s new high on Thursday. Demand for short-term U.S. government bonds also rose, even as two Federal Reserve governors signaled more interest rate cuts in October — a move that typically reduces the appeal of fixed-income investments.
U.S. 2-year Treasury yields fell to their lowest level in more than three years, showing investors are willing to accept smaller returns in exchange for the safety of government-backed assets. Meanwhile, gold climbed to $4,300, up 23% since September, pushing the value of central banks’ gold reserves above their US Treasury holdings. according to to Reuters.
Despite positive developments in the technology sector, including chipmaker TSMC’s ( TSM ) updated 2025 outlook and strong quarterly results from Bank of America and Morgan Stanley, the S&P 500 fell 0.9% on Thursday. The Dow Jones US Select Regional Banks Index fell 4.4% after two financial firms reported losses in the private credit market, according to to the Financial Times.
Related: SEC Chair: The US is 10 years behind in crypto, solving this is “a job”
Movements from addresses linked to Bitcoin miners have also raised concern. Data from CryptoQuant shows that miners deposited 51,000 BTC (worth more than $5.5 billion) on exchanges over the past seven days, the largest flow since July. The analysis noted that such behavior often precedes price weakness, since miners are historically among the largest holders of Bitcoin.
While the warning from the Bitcoin options market indicates fear of further correction, the Bitwise analyst said that extreme drops in sentiment have often “marked favorable entry points”, adding that “the recent correction has been largely driven by external factors”. Bitwise head of research André Dragosch added that Friday’s settlement event set the stage for a “contrarian buying window.”
Further downside for Bitcoin remains possible, but increased demand for put options should not necessarily be seen as a sign of sustained bearish momentum, as external factors have eased riskier traders.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed herein are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
