Crypto: Bitcoin Options Turn Bearish As BTC Flirts With Drop Below $80k
Bitcoin options flashed extreme fear signals as the spot BTC ETF outflows rose, and the odds for a drop below $80,000 increased. Will dip buyers step in to save the day?
Bitcoin options show the highest level of fear in a year, as traders brace for the possibility of a deeper selloff.
Bitcoin markets might be more stable due to high-risk leveraged positions being liquidated.
Bitcoin (BTC) underwent a sharp 10% correction between Wednesday and Thursday, retesting the $81,000 level for the first time in over two months. The move occurred as traders grew increasingly cautious following significant outflows from spot Bitcoin exchange-traded funds (ETFs), particularly as gold prices dropped 13% from their Wednesday all-time high.
The strong price changes caused traders to question the strength of the $80,000 psychological support level.
US-listed spot Bitcoin ETFs have seen $2.7 billion in net outflows since Jan. 16, representing 2.3% of total assets under management. Some market participants worry that institutional demand has stalled, while others note that gold’s 18% gain over three months may be temporarily overshadowing Bitcoin’s appeal as a store of value. Regardless of the specific catalyst for the decline, the perception of risk in the market has clearly risen.
One primary source of anxiety is the potential threat posed by quantum computing to the cryptographic methods securing blockchains. Coinbase recently formed an independent advisory board to evaluate these risks, with plans to release public research by early 2027. This initiative will operate separately from the company’s core management.
The debate intensified after Jefferies removed Bitcoin from its flagship portfolio, citing these long-term security concerns. However, cryptographer and Blockstream co-founder, Adam Back, predicted that there would be no material quantum risk over the next decade. Back argued that the technology remains at a very early stage, and even partial breaks in cryptography would not allow Bitcoin to be stolen.
Related: Bitcoin futures imbalance may spark liquidation revenge rally to $90K
The BTC options delta skew surged to 17% on Friday, reaching its highest point in over a year. In neutral market conditions, put (sell) options typically trade at a premium of 6% or less compared to equivalent call (buy) instruments. Current levels indicate extreme fear, which often leads to volatile price swings as market makers hedge against further downside.
Source: CoinTelegraph
