Bitcoin is having a tough year. Traders are betting it’s going to get worse

AI Market Analysis

The article shows Bitcoin futures slipping to $58,995, a 52% drawdown from the previous year’s peak, and a surge in put‑option activity on the iShares Bitcoin Trust (IBIT). The sharp rise in put volume—more than double the average—and a high put‑call ratio indicate bearish sentiment among institutional traders. Implied volatility at 53 suggests expectations of modest daily moves, but the market is pricing a roughly 48% chance of a further 10% drop by end‑July, outweighing the slightly higher odds of a 10% rally. This could pressure risk‑off assets such as tech stocks and high‑yield bonds, while safe‑haven currencies like the USD and CHF may see modest gains.

For the broader market, the heightened bearish bias on Bitcoin may spill over to other crypto‑linked products, including Ethereum and crypto‑focused equities, potentially prompting short‑selling activity. Traditional equity markets might experience a modest pullback in AI‑heavy growth stocks that have been buoyed by speculative capital, as investors re‑allocate toward more defensive positions. Overall, the sentiment suggests a cautious outlook for crypto assets over the next week, with Bitcoin likely to remain under pressure.

Original Article

Bitcoin is having a tough year. Traders are betting it’s going to get worse

Bitcoin futures tumbled Thursday to as low as $58,995, the lowest price since October 2024, bringing its drawdown from last year’s high to about 52 percent. The biggest cryptocurrency has been battling with the $60,000 level all year – first in February, where it found support, then again the first two weeks of June, before a pop to over $67,000.
Options traders are treating this break like it could be the tip of an iceberg.
The iShares Bitcoin Trust ETF (IBIT) traded just shy of 1.1 million options Thursday, almost double the average the past thirty days, according to Cboe LiveVol data. Put volume more than doubled calls. Traders bought 275,000 puts, compared to just under 129,000 calls, according to data from ThinkOrSwim.
Of the $187 million premium traded in IBIT, $144 million was in puts, according to SpotGamma. Of the top 20 most-traded contracts by volume, 19 were puts. The most popular contract was the 32.5 strike put expiring Friday, which needs another 4.5% slide in bitcoin to pay off.
Implied volatility in IBIT is just 53, meaning options market-makers expect a little over a 3% move per day.
According to the options prices in the July 31 expiry, there’s about a 48% chance IBIT will fall below $30.5, or drop another 10%, between now and the end of next month. The odds of a 10% rally by that time are a bit higher, around 55%.
Flows weren’t much more positive in Michael Saylor’s Strategy, where 505,000 puts and 403,000 calls traded. Traders bought 83,000 puts and sold 72,000 calls, while buying just under 58,000 calls.
“Amidst rip-roaring AI stock performance, BTC has struggled in price and in garnering attention,” said Alexander Blume, CEO of Two Prime, an institutional asset manager for bitcoin. “The wobbly behavior of Strategy continues to scare the market, harkening back to other major blow ups the market has seen.”

Source: CNBC

Disclaimer: this content is informational analysis only and does not constitute investment advice.