Key takeaways:
Increased Bitcoin put option premiums indicate cautious sentiment among traders.
US job openings are nearing five-year lows, raising fears of a recession and potential economic slowdown.
$518 million was invested in Bitcoin ETFs on Monday, while public companies continue to accumulate, reducing available supply.
Bitcoin (BTC) pro traders are wary of holding downside risks despite recent gains to $114,000, as derivatives markets reflect increased anxiety. Traders may be weighing whether these indicators signal broader concerns about global economic growth or specific fears tied to the cryptocurrency market.
The Bitcoin skew metric reached 5% on Tuesday before rising back to 8%, indicating a higher premium for put (sell) options. Typically, BTC skew fluctuates between -6% and 6% under neutral conditions. The inability to reclaim $115,000 has frustrated traders, especially as gold maintains bullish momentum, trading just 0.6% below Tuesday’s all-time high.
Gold has increased by 16.7% over the last two months, while the US Dollar Index (DXY) has consistently struggled to regain the 98.5 level, indicating weaker confidence in the US government’s fiscal position. A declining US dollar generally slows consumption, making imports more costly and reducing tax revenues from international earnings of US-listed companies.
Investor concerns about the US economy are growing as job market data reveals ongoing weakness. The US Bureau of Labor Statistics reported 7.23 million job openings in August, nearing a five-year low. “Federal unemployment insurance claims are roughly double what they were last year,” noted economists at the Economic Policy Institute Tuesday.
The S&P 500 has shown notable resilience amid this uncertainty, with traders anticipating further interest rate cuts from the US Federal Reserve (Fed) and additional liquidity injections. The Fed’s total assets stabilized in September after 30 months of decline, indicating a potential reversal that may bolster risk-on markets.
Looser economic policies have a dual positive effect on companies by lowering capital costs and diminishing returns on fixed-income instruments. Unlike Bitcoin, publicly listed companies provide dividends, buybacks, and opportunities for mergers and acquisitions, thus not solely depending on employment levels or overall economic growth.
Bitcoin options put-to-call remain stable, showing no surge in bearish demand
Bitcoin traders are not inherently bearish, despite whales and market makers being cautious about downside risks. Analyzing the put-to-call metric can clarify whether interest in neutral-to-bearish strategies has increased.
On Deribit, premiums for put (sell) options have trailed behind call (buy) options, showing greater demand for neutral-to-bullish strategies. The sharp spike on Saturday was atypical, with the total premium for that day below $13 million. Overall, the data reveals no stress or significant rise in demand for bearish positions.
The $518 million net inflow into Bitcoin spot exchange-traded funds (ETFs) on Monday highlights a clear appetite for independent hedging, not necessarily correlated with gold. Public companies like Strategy (MSTR), MARA Holdings (MARA), and Metaplanet (MTPLF) continue to accumulate Bitcoin as a reserve strategy, potentially causing a supply shock.
Ultimately, the diminished demand for downside risk exposure in Bitcoin options should be viewed as reflecting broader macroeconomic worries rather than bearish expectations.
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 here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
