Bitcoin put-call ratio hits 1-year high: Are bears preparing for drop to $55K?

Key takeaways:

• An utmost Bitcoin put-call options imbalance and a 19% delta skew uncover dense hedging against downside terms swings.
• Strategy’s currency hoard eases short-term indebtedness fears but does not clasp backmost a broader superior rotation into tech stocks.

Bitcoin has failed to reclaim the $61,000 people since Thursday, contempt optimism fueled by little crude lipid prices pursuing the US and Iran's 60-day ceasefire agreement. Demand for downside Bitcoin terms extortion jumped to unusually precocious levels, prompting traders to question whether $55,000 is the adjacent target.

Deribit Bitcoin options premium put-to-call ratio. Source: Laevitas

The premium paid connected Bitcoin enactment (sell) options connected Deribit totaled $115 cardinal connected Friday, 7 times the $16 cardinal paid connected telephone (buy) options. The imbalance was the highest successful implicit 12 months, signaling highly debased request from bulls. However, specified information does not needfully awesome condemnation from bears.

Bitcoin 30-day options delta skew (put-call) astatine Deribit. Source: Laevitas

The Bitcoin options delta skew stood astatine 19% connected Monday, meaning marketplace makers are unwilling to clasp downside terms exposure. This setup hints astatine fear, though that has been the norm for the past 4 weeks. Data aligns with increasing request for bearish hedging arsenic Bitcoin terms struggles to prolong levels supra $60,000.

Bitcoin’s weakness tin beryllium partially pinned to investors’ discomfort with MicroStrategy (MSTR US) quality to wage dividends and indebtedness maturing successful 2027. The institution reacted connected Monday by announcing an further $1.2 cardinal successful cash from caller stock income and mounting speech $1.25 cardinal successful Bitcoin for eventual sale.

The measures taken by Strategy easiness immoderate short-term concerns but besides make anxiousness astir Bitcoin’s proviso and request dynamics. Even if nary income hap implicit the adjacent mates of months, bears are much comfy knowing that Strategy has nary incentives to contented MSTR shares fixed the existent 17 months of dividend coverage.

Related: Grayscale's Pandl says Strategy should merchantability $3B Bitcoin to reconstruct confidence

Rotation from Bitcoin and golden into semiconductor stocks 

In opposition to Bitcoin investors’ pessimism, momentum successful the US banal marketplace has shifted favorably aft inflationary unit eased, with crude lipid prices dropping to their lowest levels successful 4 months. Additionally, a Goldman Sachs report projected 22% yearly net maturation for S&P 500 companies, easing concerns astir excessive valuations.

Source: X/KobeissiLetter

Retail investors look to beryllium rotating retired of golden and Bitcoin into semiconductor stocks, according to ‘The Kobeissi Letter’ analysis. Data collected by Bloomberg has shown implicit $20 cardinal successful cumulative inflows successful semiconductor exchange-traded funds (ETFs), triggering an 81% rally successful iShares Semiconductor ETF (SOXX US) and 60% gains successful VanEck Semiconductor ETF (SMH).

US-listed Bitcoin spot exchange-traded funds play nett flows, USD. Source: SoSoValue

The 7 consecutive weeks of nett outflows from the US-listed Bitcoin spot ETFs person shattered bulls’ hopes of a beardown bounce from the $58,050 lows connected June 25. Regardless of whether the sell-off tin beryllium attributed to the rotation into tech stocks, sentiment is improbable to amended portion Bitcoin spot ETFs proceed to spot beardown nett outflows.

A retest of $55,000 should not beryllium dismissed, but the accrued request for downside hedging successful Bitcoin options should not beryllium interpreted arsenic increasing assurance among bears.