Bitcoin continues to experience sharp declines, falling below $58,000 for the first time in a long time. These declines are attributed to rising inflation concerns, a more hawkish Fed, and a strengthening dollar in recent weeks.
At this point, the situation for Bitcoin is worsening, and this is reflected in the options market. According to the data, there is an increase in bets in the options market on $BTC falling to $50,000.
According to analyst Omkar Godbole’s analysis, investors in the Bitcoin derivatives market are taking positions expecting a further decline in price rather than an increase.
The analyst noted that Bitcoin, after recently falling to as low as $57,700, has partially recovered to around $58,800, while open positions have risen to 768,000 $BTC.
At this point, the analyst noted that put options, which are bets on a price decrease in the options market, are priced higher than call options across all expiry dates. According to Paradigm trading desk data, demand for the $50,000 Bitcoin put option with a September expiry date has increased.
In conclusion, according to the analyst, this positioning indicates that investors have increased the likelihood of $BTC falling below $50,000 by the end of the third quarter.
Investors Have Started Accumulating, But Bitcoin Could Fall Again!
As talk of Bitcoin reaching $50,000 continues to intensify, Glassnode reports that long-term investors have resumed buying $BTC. However, despite these purchases, the risk of eventual capitulation remains.
According to Glassnode analysts, institutional exits and increasing put positions in the options market are negatively impacting investor sentiment, but long-term holders have begun accumulating again, and many wallet groups are increasing their $BTC holdings. Additionally, spot order books on Binance and Coinbase are showing a trend towards buy orders.
This signals a shift from a selling to an accumulation trend, with $BTC trading below $60,000.
Despite this positive signal, analysts say investor fear remains high, and the amount of $BTC losing money is greater than the amount of $BTC making a profit.
In this context, Glassnode noted that risks persist due to high demand for put options in the options market and the increase in leveraged long positions, which could lead to further long liquidations and a decline in demand.
Glassnode analysts recently stated that another sharp price drop is still possible before the market bottom is definitively formed.
*This is not investment advice.
