Bitcoin traders have scrambled to load up on bearish options bets over the past 48 hours, snapping up put options that would pay off big if prices slide to $52,000 in the coming weeks. Deribit data tracked by Laevitas reveals a flurry of short-dated, out-of-the-money put purchases spanning expirations from June 22 to July 31. Notable flows include 337 contracts of June 22 $61,500 puts, 116 July 3 $60,000 puts, 380 July 3 $55,000 puts, 540 July 10 $55,000 puts, and 314 July 31 $52,000 puts. Each contract represents one bitcoin.
Put Options as Downside Insurance
A put option gives the buyer the right to sell bitcoin at a predetermined strike price by a future date. If the spot price falls below that strike, the buyer can sell at the locked-in higher price, pocketing the difference. The surge in these deep out-of-the-money puts signals a distinctly bearish sentiment among derivatives traders. Laevitas noted the concentration of buying within a 48-hour window was unusual, suggesting coordinated positioning for a sharp decline.
Triple Headwinds: Fed, ETF Outflows, and Strategy's Plight
Several catalysts align to fuel the bearish mood. The Federal Reserve's hawkish stance has strengthened the U.S. dollar, pressuring risk assets. Meanwhile, spot bitcoin ETFs have seen persistent outflows, with net withdrawals exceeding $200 million over the past week. More critically, Strategy (formerly MicroStrategy), the largest publicly traded bitcoin holder, faces mounting pressure as its preferred stock STRC plummets to record lows, well below its $100 par value. This complicates the firm's aggressive bitcoin accumulation strategy, which relies on equity-linked financing. Jeff Dorman, CIO of Arca, summed up the dilemma on X: “Either sell an enormous amount of BTC and MSTR to help bring $STRC back up near par, and at least buy yourself some time, or continue to watch every part of your cap structure melt because of the uncertainty you've created.” A forced sale of Strategy's bitcoin holdings could amplify selling pressure in the spot market.
Price Action and What's Next
As of writing, bitcoin changes hands near $62,400, down 0.8% since midnight UTC, per CoinDesk data. Prices hit a weekly high around $67,000 early this week before reversing. For the put option bets to pay off, bitcoin would need to drop another 14% from current levels to $52,000—a level not seen since November 2024. All eyes are on the next Federal Reserve meeting, ETF flow data, and whether Strategy will take steps to shore up its capital structure.