Bitcoin Traders Hedge Against 9% Drop With $100,000 Put Options

Options traders are increasingly hedging against a potential pullback in Bitcoin's price, with a particular focus on the $100,000 level. This trend is evident in the surge of the put-to-call volume ratio on crypto derivatives exchanges, indicating a shift in market sentiment towards protective strategies.

Put options, which allow investors to sell assets at a predetermined price, have seen a significant increase in demand, especially for contracts nearing expiration. The open interest in put options with a strike price of $100,000 has become the most substantial on the exchange for Bitcoin investors, reflecting a put-to-call ratio of 1.16. This cautious sentiment among traders aligns with the Federal Reserve's ongoing efforts to navigate a complex economic landscape.

Geopolitical unrest, particularly in the Middle East, and fluctuating energy prices have contributed to inflation concerns and labor market risks. As US officials are expected to maintain their current policy stance during an upcoming meeting, market attention will likely focus on the Fed’s latest forecasts regarding growth, unemployment, and interest rates.

Javier Rodriguez-Alarcón, chief investment officer of XBTO, highlighted the potential impact of the Fed’s signals. He stated that a hawkish signal from the Federal Reserve could strengthen the US dollar and trigger a test of the psychological $100,000 mark for Bitcoin. The geopolitical landscape remains unpredictable, with any credible de-escalation in the Middle East potentially acting as a significant catalyst for risk assets like Bitcoin, while further deterioration could lead to additional downward pressure across markets.

Bitcoin recently reached an all-time high of $111,980 on May 22 and has since experienced a more than 50% increase following the election of Donald Trump as president for a second term. However, as of this writing, the market’s leading crypto trades at around $102,948, representing a drop of nearly 9% after a recent failed attempt to consolidate above the $110,000 level and enter a new price discovery phase.

Geopolitical tensions have further impacted BTC’s performance in longer periods as well, with the monthly time frame showcasing a drop of little over 8% for the cryptocurrency. The daily chart shows BTC’s attempt to consolidate above the key $100,000 mark.