Key takeaways:
The increasing interest in put options and miner BTC deposits suggests a growing caution among traders, even as Bitcoin remains resilient near $108,000.
Bitwise analysts believe that significant declines in market sentiment often signal potential rebounds, characterizing the current correction as a “contrarian buying opportunity.”
On Thursday, Bitcoin (BTC) dropped to $107,600, leading traders to speculate if Friday’s sudden downturn indicated the end of the bull run that reached an all-time high on October 6. A warning signal from Bitcoin’s options market has created unease among traders, particularly in light of increased miner outflows, challenging the durability of the $108,000 support level.
The Bitcoin options delta skew rose above 10%, indicating that professional traders are willing to pay a premium for put (sell) options, a typical sign of bearish sentiment. Under usual conditions, this metric fluctuates between -6% and +6%. Notably, the skew has deteriorated since Friday, pointing to increasing skepticism among traders regarding Bitcoin’s upward momentum.
US President Donald Trump’s confirmation that the trade conflict with China remains unresolved has further impacted market sentiment. Trump has threatened additional restrictions on trade with China following its halt of US soybean purchases, according to Yahoo Finance. Additionally, uncertainty around US economic data amid the ongoing government shutdown is contributing to the pressure.
Demand for downside protection strategies on Deribit surged on Thursday, with trading volumes for put options surpassing call options by 50%, indicating growing market stress. This figure reached its highest level in over 30 days. Cryptocurrency traders typically display optimism, resulting in a neutral reading for the put-to-call ratio hovering around -20%, favoring call options.
Bitcoin derivatives merely reflect the worsening US macroeconomics
Bitcoin wasn’t the sole market impacted by shifts in investor sentiment, as evidenced by gold reaching a new all-time high on Thursday. Demand for short-term US government bonds also experienced a spike, even as two Federal Reserve Governors indicated potential interest rate cuts in October — an action that usually diminishes the attractiveness of fixed-income investments.
The yields on the US two-year Treasury fell to their lowest level in over three years, indicating that investors prefer smaller returns for the safety of government-backed assets. Simultaneously, gold climbed to $4,300, a 23% rise since September, resulting in central banks’ gold reserves exceeding their holdings of US Treasuries, according to Reuters.
Despite positive updates in the tech sector, including TSMC (TSM) enhancing its 2025 forecast and strong quarterly results from Bank of America and Morgan Stanley, the S&P 500 dipped 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 the Financial Times.
Related: SEC chair: US is 10 years behind on crypto, fixing this is ‘job one’
Shifts in Bitcoin miner-associated addresses have also raised alarms. Data from CryptoQuant reveals that miners deposited 51,000 BTC (valued over $5.5 billion) on exchanges over the past week, marking the largest outflow since July. The analysis highlighted that such activity frequently precedes price downturns, as miners have historically been significant holders of Bitcoin.
Although the warnings from Bitcoin’s options market suggest concerns over further corrections, analysts from Bitwise noted that drastic shifts in sentiment have often indicated “favorable entry points,” asserting that “the recent correction was primarily driven by outside factors.” Bitwise’s head of research, André Dragosch, indicated that Friday’s liquidation event has set the groundwork for a “contrarian buying opportunity.”
Additional declines for Bitcoin remain plausible, but the increase in interest for put options should not automatically indicate lasting bearish sentiment, as external factors have merely heightened traders’ risk aversion.
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.
