Shifting Sentiments in the Crypto Market: A Closer Look at Deribit’s Options Trends
Recent trends in the cryptocurrency market reveal a significant shift in sentiment, particularly evident in the options market on Deribit. The focus has now turned to the $80,000 bitcoin (BTC) put option, which offers traders a safety net below this price point. This contrasts starkly with the early months of this year when traders were predominantly interested in call options at six-figure levels.
As of now, the open positions for the $80,000 put option have reached an impressive 10,278 contracts, translating to a substantial notional open interest of approximately $864.26 million, as reported by Amberdata. This development makes it the most sought-after options play on Deribit, where each contract corresponds to one BTC.
This change in positioning marks a notable departure from early January, when the $120,000 call option was the market favorite, boasting an open interest of nearly $1.5 billion. Just last month, the spotlight was on the $100,000 call option, which had captured the traders’ attention.
The current positioning indicates that traders have recalibrated their expectations for upward price movements in light of recent market downturns and ongoing economic uncertainties. Bitcoin experienced a significant decline of 11.66% in the first quarter, with prices dipping below $80,000 at one point, largely influenced by President Donald Trump’s tariffs impacting Wall Street’s stability. Additionally, the market was weighed down by a lack of new purchases in the U.S. strategic reserve, further contributing to the downward pressure on prices.
Later today, President Trump is anticipated to announce extensive reciprocal tariffs on U.S. trading partners, a move that could potentially escalate into a full-blown trade war. In response, BTC traders are increasingly seeking downside protection.
According to analytics firm Block Scholes, “BTC volatility smiles have shifted dramatically towards out-of-the-money (OTM) puts, reaching levels not seen since the U.S. Banking Crisis in March 2023.” Furthermore, Ethereum’s (ETH) short-term volatility smile skews have shown some recovery from their previous strong inclination towards OTM puts.
