Looking for proof of the significant shift in sentiment within the crypto market recently? Look no further than the options market on Deribit, where the $80,000 bitcoin (BTC) put option, designed to provide downside protection beneath that benchmark, has emerged as the top choice among traders.
This marks a complete turnaround from earlier this year when call options at six-figure prices attracted the most investor interest.
Currently, there are 10,278 open contracts for the $80,000 put option, reflecting a total open interest of $864.26 million, based on data from Amberdata. This positions it as the leading options contract on Deribit, with each contract representing one BTC.
This also signals a dramatic shift in strategy since January, when the $120,000 call was the favored option, boasting an open interest of nearly $1.5 billion. Last month, the $100,000 call option became the most sought-after.
This notable repositioning suggests that traders have recalibrated their expectations for upward movement in light of the recent market downturn and ongoing economic uncertainties. BTC experienced an 11.66% decline in the first quarter alone, dipping below $80,000 at one point due to the impact of President Trump’s tariffs on Wall Street. Furthermore, disappointment regarding the absence of new purchases in the U.S. strategic reserve has also affected prices.
On Wednesday, Trump is anticipated to announce extensive reciprocal tariffs against trading partners, potentially igniting a full-scale trade war and pushing BTC traders towards securing downside protection.
According to market analysis firm Block Scholes, “BTC volatility smiles have shifted sharply towards out-of-the-money (OTM) puts, reaching levels not observed since the U.S. banking crisis in March 2023. Meanwhile, the short-term volatility smile skews for ETH have partially rebounded from their heavily OTM put inclination,” in their update on Wednesday.