Searching for proof of the significant shift in sentiment within the cryptocurrency market recently? Look to Deribit’s options market, where the $80,000 bitcoin (BTC) put option, which provides downside protection beneath that level, has emerged as the top choice.
This marks a complete turnaround from earlier this year, when call options at six-figure prices attracted the highest interest from traders.
Currently, the open positions for the $80,000 put option stand at 10,278 contracts, translating to a substantial notional open interest of $864.26 million, according to data from Amberdata. This makes it the most favored options play on Deribit, with each contract representing one BTC.
This shift in positioning is notable compared to early January when the $120,000 strike call option was the favored bet with an open interest nearing $1.5 billion. In the previous month, the $100,000 call was the most popular.
The change in positioning reflects traders’ reassessment of potential upside expectations amid recent market declines and ongoing economic uncertainty. Bitcoin dropped by 11.66% in the first quarter, with prices falling under $80,000 at one point due to President Donald Trump’s tariffs impacting Wall Street. Moreover, disappointment over a lack of new purchases for the U.S. strategic reserve contributed to the downward pressure on prices.
Later on Wednesday, Trump is anticipated to unveil extensive reciprocal tariffs on its trade partners, potentially igniting a full-scale trade war. This has resulted in BTC traders seeking downside protection.
“The volatility smiles for BTC have shifted dramatically toward out-of-the-money (OTM) puts, reaching levels not seen since the U.S. Banking Crisis in March 2023. Meanwhile, ETH’s short-term volatility smile skews have somewhat recovered from their strong inclination toward OTM puts,” analytics firm Block Scholes highlighted in its market update on Wednesday.
