As the first quarter came to a close on Monday, a significant options trade for bitcoin (BTC) occurred on Deribit, indicating a bearish outlook from the trader involved.
This so-called block trade involved a premium exceeding $1 million for 1,180 contracts of the $70,000 put option set to expire on April 25, based on data collected from various sources.
Put options provide the buyer with the right, but not the obligation, to sell the underlying asset at a specified price at a later date. A buyer of a put option typically has a bearish stance, anticipating that the price will fall below $70,000 from the current level of $84,000.
A block trade refers to a sizable, privately negotiated transaction often executed outside of the public markets, commonly by institutional investors, to prevent influencing the market price.
Other noteworthy transactions involved a put ratio spread, which included long positions in the $75,000 strike put alongside double short positions in the $70,000 put. There was also a risk reversal, consisting of a long position in the $90,000 call and a short position in the $70,000 put, as highlighted by the founder of Pelion Capital.
The bearish activity in the $70,000 put options comes after purchases of put options set to expire on April 4 in the $78,000 to $85,000 range last week, along with a rise in interest for the $76,000 put option expiring on April 25.
Overall, BTC puts are trading at a higher premium compared to calls, reflecting a bearish sentiment extending to the expiry at the end of May, as indicated by negative values in risk reversals.
The inclination towards puts, which provide downside coverage, likely stems from investor concerns about the anticipated announcement of reciprocal tariffs by President Trump’s administration on Wednesday. Such a decisive action could negatively impact risk assets, including cryptocurrencies.