Downside expectations have gained strength in the Bitcoin market in the last 24 to 48 hours. According to data from cryptocurrency derivatives exchange Deribit, investors turned to short-term and near-term put options that can provide profits if the price decline deepens. Maturities between the end of June and the end of July stood out in transactions.
Downside protection came to the fore in Deribit data
According to the flows monitored by Laevitas, 337 contracts were traded in $61,500 put options due on June 22, 116 contracts were traded in $60,000 put options due on July 3, and 380 contracts were traded in $55,000 options. In addition, 540 contracts of $55,000 put options with a maturity of July 10 and 314 contracts of $52,000 put options with a maturity of July 31 attracted attention.
| Maturity | Strike price | Number of contracts |
|---|---|---|
| June 22 | $61,500 | 337 |
| July 3 | $60,000 | 116 |
| July 3 | $55,000 | 380 |
| 10 July | $55,000 | 540 |
| 31 July | $52,000 | 314 |
A put option gives the investor the right to sell bitcoin at a predetermined price on or by a certain date. For this reason, these transactions are often considered as a means of protection against decline or as a reflection of downward expectations. Deribit is known as one of the prominent platforms in the cryptocurrency options market.
Recent transactions show that investors are positioning themselves against the risk of a sharper pullback in the coming weeks, and interest in put options, especially those with low strike prices, has increased.
Sources of pressure in the market
According to the data reported in the news, there are several basic factors behind this trend. While the US Federal Reserve’s maintenance of its tight monetary policy line supported the dollar index, the ongoing outflows from spot bitcoin ETFs also put additional pressure on the market. Added to this was the uncertainty around the large institutional bitcoin buyer Strategy.
Strategy is one of the publicly traded companies known for holding large amounts of bitcoin on its balance sheet. The aggressive approach to accumulating bitcoin has been further complicated by the fact that the company’s preferred stock, STRC, has fallen to record lows, significantly below its $100 par value.
Arca Investment Director Jeff Dorman stated that the company may either have to sell a large amount of BTC and MSTR and bring the STRC price closer to the nominal value, or watch the pressure on the capital structure continue due to the resulting uncertainty.
Bitcoin price remains below weekly peak
According to CoinDesk data, bitcoin changed hands at around $62,400 at the time of writing. This level marked a 0.8 percent decline since midnight UTC. It was seen that the price rose to around $67,000 in the first part of the week, but gave back a significant part of these gains in subsequent transactions.
The recent concentration in the options market reveals that investors continue to seek direction in the short term. Particularly the demand for contracts with strike prices of $55,000 and $52,000 indicates that the cautious stance in the market has strengthened.
