A bear market leaves investors with three choices: Buy the dip, sell at a loss or HODL through the FUD.
From a technical view, Bitcoin has been consolidating around $60k for nearly two weeks, which could be a sign that buyers are finally stepping in.
According to market makers, dip buyers historically accumulated around this cost-basis, helping Bitcoin establish a floor before smart money triggers a rebound.
However, recent whale activity paints a different picture. One analyst spotted a whale who just sold 800 BTC, locking in a loss of around $35 million.
The investor bought the entire position near last November’s peak at roughly $107,000 per coin, held through seven months of downside, and finally sold today at around $62k.
In this case, it looks like some investors are choosing to sell at a loss.
And the broader market data seems to back that up. Looking at the chart above, the amount of Bitcoin supply being held at a loss has climbed to 10.56 million BTC, overtaking the previous peak of 10.47 million BTC.
Put simply, around half of Bitcoin’s [BTC] circulating supply is now underwater, showing just how much pressure holders are under at current prices.
However, with capitulation signals starting to appear, it’s clear that investor patience is beginning to wear thin. That’s why calls that Bitcoin has already bottomed around $60k may be a little early.
Against this backdrop, traders piling into BTC put Options doesn’t look random. Instead, it looks more like a hedge against the risk of another leg lower before Bitcoin finds a more convincing bottom.
Bitcoin Options markets signal rising demand for downside protection
Bitcoin’s Options market is starting to heat up.
For context, a rise in Options activity usually signals that traders are preparing for a bigger move in either direction. But this time, the flow appears to be leaning bearish, with more traders gravitating toward put Options.
That suggests some market participants are either hedging against further downside or actively betting that BTC has more room to fall.
As the chart below shows, Bitcoin’s Options Open Interest has climbed to a monthly high of $36 billion. The biggest single-day jump came on the 18th of June, marking the sharpest increase in Options positioning so far this month.
More notably, one trader pointed out that Deribit traders have been loading up on short-dated puts targeting $60k in early July, $55k by the 10th of July, and as low as $52k by the end of the month.
Taken together, the surge in Open Interest and growing demand for downside protection suggests that traders are preparing for the possibility of another leg lower before Bitcoin can establish a bottom.
Given the recent rise in unrealized losses, growing signs of capitulation, and continued uncertainty around key support levels, the increase in bearish positioning doesn’t seem entirely surprising.
Instead, it appears that traders are starting to position “strategically” for a potential move toward $52k by the end of July.
Final Summary
- Nearly half of Bitcoin holders are currently sitting on losses, showing growing signs of market capitulation.
- Options traders are increasingly betting on more downside, with some targeting a move to $52k by the end of July.