Professional traders are paying a 13% premium for downside protection as Bitcoin struggles to hold above $66,000. While traditional assets like stocks and gold remain strong, U.S. Bitcoin ETFs have seen $910 million in outflows, indicating rising institutional caution. Analysis of options data and stablecoin markets reveals a sustained bearish bias among sophisticated market participants.
Bitcoin price entered a downward spiral after rejecting near $71,000 and has struggled to hold support above $66,000. Options markets reflect growing fear as professional traders avoid downside price exposure, effectively betting on a retest of $60,000.
Bitcoin put options traded at a 13% premium relative to call instruments on Thursday, a level sustained for four weeks. This indicates professional sentiment is leaning heavily toward caution under neutral market conditions.
According to data from Laevitas, the most traded strategies on Deribit were bear diagonal spreads, short straddles, and short risk reversals. These neutral-to-bearish positions show a clear bias among options traders.
Stablecoin demand in China, a gauge of crypto market risk appetite, shows a 0.2% discount to the U.S. dollar. This suggests moderate outflows, though an improvement from the 1.4% discount seen earlier in the week.
Part of the trader discontent stems from lackluster flows in Bitcoin exchange-traded funds. U.S.-listed Bitcoin ETFs have seen $910 million in total outflows since February 11, catching bulls off balance.
This risk-aversion appears largely restricted to crypto, as the S&P 500 sits only 2% below its all-time high and gold prices have rallied. Traders are likely staying extremely cautious until a clear rationale for Bitcoin’s recent crash emerges.
