- Traders are covering the downside risk of a Bitcoin slump this month.
- Bitcoin is down 24% from its peak.
- Analysts are still bullish on long-term price recovery.
Bitcoin’s rocky week is about to get even worse.
Or that’s what traders are signalling with their positioning in the options market.
Traders have sunk $550 million into bets that the price could fall as low as $70,000 this month.
Data from crypto analytics platform Amberdata shows, via an indicator known as the 25-delta skew, that traders are expecting an extended Bitcoin price slide.
They’re piling into bearish, or “put,” options to protect against the plunging price.
On Monday, as markets cratered on fears about tariffs and the US economy, almost 43% of contracts traded over those 24 hours were purchases of puts, Sean Dawson, head of research at options trading protocol Derive, wrote in a Tuesday report.
The moves come as analysts predict more pain ahead for Bitcoin amid massive ETF outflows and concerns over US President Donald Trump’s tariff zig-zag, the US economy, and geopolitical tensions.
Arthur Hayes, chief investment officer at Maelstrom, said in a blog post that Bitcoin could slide as low as $75,000.
This week, he indicated the market was flashing red based on the open interests for options contracts at the $75,000 price mark.
“If we get to that range, it will be violent,” Hayes said.
Mintology CEO Zach Burks also said he expects Bitcoin to drop as low as $72,000 as the allure of the asset as a so-called Trump trade has faded.
2025 Rally
Still, traders expect Bitcoin will ultimately rally this year.
Data from crypto derivatives platform Deribit shows a massive build-up of bullish Bitcoin contracts that pay off in the $100,000 to $120,000 range.
The bulk of these bullish bets are for contracts expiring after May, another indication that traders expect Bitcoin’s price to recover in the second half.
Hayes predicted Bitcoin will leap to $250,000 this year, a move driven by dollar devaluation due to Trump’s policies.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him at osato@dlnews.com.