Key takeaways:
Professional traders are paying a 13% premium for downside protection as Bitcoin struggles to maintain support above $66,000.
While stocks and gold remain strong, $910 million in Bitcoin ETF outflows suggest that institutional investor caution is rising.
Bitcoin (BTC) price entered a downward spiral after rejecting near $71,000 on Sunday. Despite successfully defending the $66,000 level throughout the week, options markets reflect growing fear as professional traders avoid downside price exposure.
Even with relative strength in the stock market and gold prices, traders seem to be effectively betting on a $60,000 retest rather than overreacting to Bitcoin price dips.
BTC two-month options delta skew (put-call) at Deribit. Source: laevitas.ch
Bitcoin put (sell) options traded at a 13% premium relative to call (buy) instruments on Thursday. Under neutral conditions, the delta skew metric typically ranges between -6% and +6%, indicating balanced demand for upside and downside strategies. The fact that these levels have been sustained over the past four weeks shows that professional sentiment is leaning heavily toward caution.
Top BTC options strategies at Derbit past 48 hours, USD. Source: Laevitas.ch
This bearish bias is clear in the neutral-to-bearish positioning seen in Bitcoin options. According to Laevitas data, the bear diagonal spread, short straddle and short risk reversal were the most traded strategies on the Deribit exchange over the past 48 hours.
The first lowers the cost of the bearish bet because the short-term option loses value faster, while the second maximizes profit if Bitcoin price barely moves. The short risk reversal, on the other hand, generates profit from a downward move with little to no upfront cost, but it carries unlimited risk if the price spikes.
Weak institutional demand for Bitcoin ETFs fuels discontent
To better gauge the risk appetite of traders, analysts often look at stablecoin demand in China. When investors rush to exit the cryptocurrency market, this indicator usually drops below parity.
USD stablecoin premium/discount relative to USD/CNY rate. Source:…..
