Bitcoin DEX Traders Position for Downside Volatility With $85K-$106K Puts, Derive Data Show
Bitcoin (BTC) options flow on the leading decentralized onchain platform Derive.xyz shows that traders are preparing for downside price volatility over the next couple of weeks.
As of Monday, 20% of the platform's total BTC options open interest, valued at over $54 million, was concentrated in the July 11 expiry put options with strikes at $85,000, $100,000, and $106,000, according to data shared by Derive.
"This suggests that traders are positioning for potential downside, possibly bracing for macro uncertainty or profit-taking after recent strength," Nick Forster, founder of Derive told CoinDesk.
A put option gives the holder the right to sell the underlying asset, such as BTC, at a predetermined price on or before a specified future date. A put buyer is implicitly bearish on the market, seeking to hedge against or profit from a potential decline in the underlying asset's price. Open interest refers to the dollar value of the number of active options contracts at a given time.
Forster added that put options accounted for over 70% of the trading volume in the past 24 hours, a sign that "BTC traders are on the defensive."
The bearish flow contradicts activity on the centralized crypto options giant Deribit, where traders abandoned the July expiry put options while buying back upside bets or call options. The adjustment happened as BTC's price rose over 7% last week, marking a strong bounce from sub-$100,000 levels.
"We observe the dumping of no longer required $100,000 and below puts in July and buyback (blue) of $108,000-$115,000 plus calls. With a calmer environment and the upcoming July 4th U.S. long weekend, more inventory was sold onto dealers," Deribit noted on X.
DEX traders optimistic about ETH
Traders on Derive leaned bullish on ether, with about 30% of open interest concentrated in the $2,900 strike call options and another 10% in the $3,200 call.
"This positioning seems to be driven by anticipation of ETHCC in Cannes – a major event historically associated with product announcements and ecosystem growth. Traders are clearly expecting catalysts that could drive upward momentum," Forster noted.
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Bitcoin DEX traders anticipate downside volatility with anMsrategy of purchasing puts priced between $85K and$106k, as data suggests a growing risk-aversion sentiment.
captivating insight into ANALYZEVOLATILITY by Studying the Strategic Positioning of Bitcoin DEX Traders in terms of $85K-$106, TLC with Original Derivative Data.
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Bitcoin DEX traders anticipate potential downside volatility within the range of $85K to$106k, preparing their strategies with put options as a hedge against price drops.
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Traders on Bitcoin decentralized exchanges have adopted a defensive stance against downside volatility by purchasing puts at the $85K -$106Thousand strike, which can be attributed to their calculated strategy aimed towards fortifying positions should markets encounter further price drops.
The strategic positioning of Bitcoin DEX traders to hedge downside volatility by purchasing $85K-$106,423 puts presents a calculated risk management approach aimed at mitigating potential losses amidst the uncertain market conditions.
Here, traders using BitMEX as the primary Bitcoin decentralized exchange have positioned for potential downside volatility in anticipation of prices ranging between $85K and 106 thousand with tradable put options to manage risks.
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