- Bitcoin traders are heavily buying short- and near-dated put options on Deribit, signaling growing bets on a deeper price drop toward levels as low as $52,000.
- The rush into out-of-the-money puts reflects mounting bearish sentiment driven by a hawkish Federal Reserve, a stronger dollar and dominant BTC holder Strategy's growing complications.
Bitcoin BTC$62,547.79 traders are scrambling to position for a deeper selloff, snapping up put options that would deliver big payouts if prices slide all the way down to $52,000 in the coming weeks.
In the past 24 to 48 hours, crypto exchange Deribit saw heavy buying of short- and near-dated put options, spanning expirations from June 22 to July 31, according to data tracked by Laevitas. Notable flows included:
- June 22 $61,500 puts (337 contracts)
- July 3 $60,000 puts (116 contracts) and $55,000 puts (380 contracts)
- July 10 $55,000 puts (540 contracts)
- July 31 $52,000 puts (314 contracts)
A put option is likely an insurance against market swoons. A put buyer locks in the right to sell bitcoin at a specific strike price in the future. If the price drops below that strike price, the buyer can still sell at the predetermined higher price, thus pocketing the difference as profit. On Deribit, one options contract represents on BTC.
The surge in these out-of-the-money puts reflects a distinctly bearish sentiment and understandably so, as several catalysts are weighing on the market.
