Bitcoin News Today: Institutions Signal Bitcoin Bottom Amid Retail Caution and Fed Uncertainty

Bitcoin Options Traders Signal Cautious Optimism Amid Market Turbulence

A $2 billion call condor options trade executed on Deribit has become a focal point for Bitcoin (BTC) market participants, signaling institutional confidence that the recent selloff has bottomed out. The block trade, structured to profit if BTC settles between $100,000 and $118,000 by December 2025, reflects a strategic pivot from damage control to accumulation among large players. By purchasing call options at $100,000 and $118,000 while selling calls at $106,000 and $112,000, the trader targets a controlled rally without anticipating a breakout above $118,000. This positioning aligns with broader market trends showing speculative froth has been purged, with open interest in Bitcoin derivatives plummeting by 1.3 million BTC over 30 days-primarily on Binance.

The trade's timing coincides with a critical shift in on-chain dynamics. While retail investors (holding <10 BTC) have been net sellers over 60 days, mid-sized "sharks" and institutions holding 100–1,000 BTC and >10,000 BTC have steadily accumulated, according to CryptoQuant data. This divergence suggests a transition from panic-driven liquidation to a more measured distribution phase. However, the 1,000–10,000 BTC cohort-a group often indicative of near-term market sentiment-continues to sell, creating a hurdle for confirming a full reversal.

Macro conditions further complicate the outlook. The Federal Reserve's December policy meeting looms, with markets pricing in an 81% probability of a rate cut. A dovish outcome could provide liquidity tailwinds for risk assets, including Bitcoin, which has rebounded above $87,000 but remains vulnerable to volatility according to analysis. Jake Ostrovskis, an OTC trader at Wintermute, noted that the "year-end Santa rally" narrative has been priced out, replaced by a more tempered expectation of a range-bound ascent. Key signals for a "genuine low" include declining implied volatility, a return to contango in the volatility term structure, and a skew drifting toward neutrality-conditions not yet fully realized as analysts point out.

Market structure indicators underscore the uncertainty. Bitcoin's derivatives market remains in backwardation, where short-term volatility is more expensive than long-term, a hallmark of distressed conditions. Sean Dawson of Derive emphasized that a shift to contango would signal stabilized expectations, while Adam Chu of GreeksLive highlighted that elevated volatility and negative skew since October's flash crash indicate lingering bearish sentiment.

Despite these risks, the Deribit trade represents a bet on structural resilience. The position's scale-20,000 BTC notional-has triggered hedging flows as dealers adjust exposure, potentially amplifying demand if BTC approaches the $100,000 threshold. This self-fulfilling dynamic mirrors historical "cleansing phases" that precede bullish cycles, as liquidations clear weak hands and establish a firmer base.

Bitcoin now faces a critical juncture: confirming accumulation through sustained buying from the 1,000–10,000 BTC cohort, stabilizing ETF outflows, and receiving a Fed signal that eases macro concerns. Until then, the market remains in a fragile equilibrium, where institutional optimism contends with retail caution and macro volatility.