The Bitcoin options market is flashing signs of deepening bearish sentiment as institutional traders ramp up purchases of put options exceeding $1.15 billion in total value. This accounts for roughly 28% of all Bitcoin options activity, marking the most defensive positioning since the October 11 market crash.
The surge in demand for downside protection comes as Bitcoin struggles to hold above $110,000, following a sharp rejection at the $115,000 resistance level. Traders appear increasingly cautious, betting on short-term volatility and a potential correction.
Data from Greeks.Live highlights that most of these positions are short-dated, out-of-the-money puts expiring this week or later in the month. The $104,000–$108,000 strike range has emerged as a critical zone of institutional activity, reflecting heightened concern that Bitcoin could break below current support levels.
Market Skew Mirrors October Crash Levels
Market sentiment indicators show growing unease. The options skew, which measures the cost of puts relative to calls, has turned sharply negative—mirroring the same levels seen before the October 11 selloff. Analysts suggest this reflects a renewed sense of risk aversion among institutional players and market makers.
Such shifts in derivatives positioning often foreshadow increased spot market volatility, particularly when large players hedge against sudden downturns. Analysts point to the following warning signs:
- Rising volatility premiums, signaling fear of near-term price swings.
- Elevated open interest in short-term puts, indicating stronger downside protection.
- ETF outflows suggesting weakening institutional conviction.
“The data clearly show investors are bracing for turbulence,” one derivatives strategist noted, adding that protective puts have become a preferred strategy amid the uncertain macro backdrop and tightening liquidity in the crypto space.
Bitcoin Risks Retesting the $100K Support
Technical analysts warn that Bitcoin could retest the $100,000 level, a critical psychological and structural support. Market expert IncomeSharks shared a chart resembling early-2025 patterns, when Bitcoin plunged toward $80,000 before rebounding.
“If the $110K zone fails to hold, a slide to $100K—or even below—cannot be ruled out,” the analyst said, emphasizing that the setup could mainly “punish leverage traders, not spot holders.”
Across the crypto landscape, pressure is intensifying. Coinglass data shows $450 million in liquidations, including $290 million in long positions, as traders unwind leveraged bets. Friday’s options expiry could prove pivotal in determining whether Bitcoin stabilizes or faces another round of capitulation.