Friday’s low was its weakest since early October 2024. This was just before Bitcoin’s rally intensified as Donald Trump came close to winning the US presidential election, having signaled his intention to support the crypto on the campaign trail.
However, market participants were skeptical about Friday’s recovery.
The options market has shown that investors are anticipating further losses on Bitcoin as demand for protection from the downside increases. Data from Deriv.xyz, a decentralized options platform, has shown that there has been a significant increase in put open interest in Bitcoin, or expectations that the price will drop further.
Traders focused on the $60,000 to $50,000 strikes for February 27 expiration. Those bets show that investors are betting that Bitcoin will end up close to or at the same levels as those levels by that date.
“It’s a one-way market. There’s a lot of demand for downside protection,” said Shawn Dawson, head of research at Deriv.xyz. “While the long-term fundamentals for Bitcoin remain intact, the options market is clearly signaling that this aggressive decline could continue in the near term.”