Deribit data shows the largest concentration of open interest clustering around downside protection, signalling they are betting the rebound may not last
Published Fri, Mar 6, 2026 · 09:17 PM
[LONDON] Traders in the Bitcoin options market continue to price in downside risk and remain pessimistic about the cryptocurrency despite a recent surge in prices.
It climbed to a one-month high above US$74,000 on Wednesday (Mar 4), as it bounced back from a low near US$63,000 on Saturday after the US and Israel bombed Iran.
The token fell as much as 1.4 per cent in early European trading on Friday and was hovering around US$70,700 at 7 am in London.
Despite the gains in the first week of March, investors are wary.
The largest concentration of open interest – the number of outstanding contracts in the Bitcoin options market – is clustered around downside protection at US$60,000, data from Coinbase’s crypto-options exchange Deribit shows.
That signals traders are betting the recent rebound may not last.
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Open interest in major exchanges jumped to US$16 billion from US$13 billion since the start of the week, but it plateaued after the price of Bitcoin stalled, crypto-analytics company Kaiko said.
The cryptocurrency’s increase in the first week of March to the US$74,000 level was “an encouraging surge”, because it broke through a resistance area that lasted for four weeks, said Alex Kuptsikevich, chief market analyst at FxPro.
He attributed the price increase to a short squeeze. The recovery lost momentum, however, and “the bulls still have to convince the community that the bear market is over”, he said.
About US$861 million in short positions have been liquidated since Monday, compared with US$536 million in longs, said Kaiko.
Funding rates slipped into negative territory ahead of the rally on Thursday as open interest climbed, signalling an increase in short bets, the company said.
“Positioning still seems fairly bearish,” said Greg Guttas, head of over-the counter trading at fintech company Flowdesk.
“Funding rates on perpetual futures are roughly flat but off the weekend lows, where they were negative. Puts are still more expensive than calls.”
A higher cost for puts signals that traders are more concerned about downside risk, and are paying a premium for protection against a decline in Bitcoin’s price.
“Bitcoin has already retraced more than 50 per cent from its all-time high. At those levels, not many sellers are left,” said Adam Haeems, head of asset management at Tesseract Group.
He attributed the recent price surge to short sellers being forced to buy back their positions while sell-side liquidity was low and interest in shorts was elevated, in addition to an uptick in buying from exchange-traded funds (ETFs).
It was not a return of bullish conviction, he said.
The jump in crude-oil prices resulting from the war in the Middle East also presents a long-term price risk for Bitcoin, as higher inflation could lead the US Federal Reserve to raise interest rates, he added.
The cryptocurrency’s market depth – the capacity to absorb large trades without significant price swings – is down about 36 per cent from the high in 2025, showing no signs of recovery.
The combination of low activity and shallow market depth has kept money on the sidelines, reinforcing thin liquidity and lower prices.
Still, some signs of support are present for Bitcoin.
US-listed spot Bitcoin ETFs have attracted more than US$900 million in inflows so far in March, data compiled by Bloomberg shows.
Flows in and out of these products are viewed as an important gauge of investor confidence in the market. BLOOMBERG
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