Bitcoin’s price may face difficulty maintaining levels above $70,000 as traders shift towards bearish options strategies, indicating a possible retest of earlier annual lows.
Market Analysis
Cointelegraph’s market insights
Key takeaways:
- Traders are currently paying a 13% premium for protective options, reflecting concerns over Bitcoin’s ability to hold above $66,000.
- A note of caution is prevalent among institutional investors, as indicated by $910 million in recent Bitcoin ETF outflows.
On Sunday, Bitcoin’s price declined after failing to maintain a resistance level around $71,000. Despite a persistent defense of the $66,000 mark throughout the week, options data reveals a rising sentiment of fear among traders.
BTC two-month options delta skew (put-call) at Deribit. Source: laevitas.ch
Traders largely appear to be anticipating a retest of the $60,000 range, rather than reacting to the current price fluctuations of Bitcoin. Warning signs are evident in the options market, where the put options command a premium compared to calls, with a delta skew metric signaling a bearish posture.
Top BTC options strategies at Derbit
A lack of institutional demand for Bitcoin ETFs has contributed to trader skepticism, as evidenced by diminishing flows into these funds. This situation signals a need for clarity before traders reassess their outlook.
Overall, while the options market reflects a cautious approach towards Bitcoin’s price trajectory, an absence of a robust explanation for the previous downturn to $60,200 observed in February keeps traders on alert.
