Deribit Sees Shift in Options Market Focus to Bearish Bets
The options market is shifting its focus as July comes to a close. On Deribit, the world's largest crypto options exchange, the $60,000 Bitcoin put option has taken over as the most popular bet, with a notional open interest of $1.17 billion.
This puts traders who bought puts in the position of hedging against market declines. Until recently, call options at strike prices of $70,000 and $72,000 were the most popular bets, each boasting a notional open interest of $2.5 billion. However, this changed after Bitcoin's price fell below $60,000 last month.
The closure of those bets was likely catalyzed by the recent Fed meeting and Friday's expiry of $10 billion in BTC and ETH options. The notional open interest on the $70,000 call has fallen to $943 million, while the $72,000 call stands at $888 million.
Looking at seasonality, July has produced a median return of 8.61% since 2013. This year's performance is only 8.9%, which may not be exciting but is in line with historical trends. However, a positive July often leads to a negative August, producing a median return of -7.51%. Given this pattern, the mood for Bitcoin heading into August appears bearish.