Bitcoin options signal rising fear as BTC tests $80K support

Bitcoin fell around 10% between Wednesday and Thursday, briefly retesting the $81,000 level for the first time in more than two months.

The correction came as market sentiment weakened following heavy outflows from US-listed spot Bitcoin exchange-traded funds.

Net outflows from spot Bitcoin ETFs reached $2.7 billion since Jan. 16, accounting for roughly 2.3% of total assets under management.

Traders increasingly questioned the resilience of the $80,000 psychological support as selling pressure accelerated.

The downturn coincided with a sharp pullback in gold, which dropped about 13% from its Wednesday all-time high.

Some investors believe gold’s recent 18% rally over three months has temporarily overshadowed Bitcoin’s appeal as a store of value.

Others argue the broader issue is a general rise in market risk perception rather than a single asset-specific trigger.

Concerns over long-term security risks added to investor caution during the sell-off.

One focal point was the potential impact of quantum computing on blockchain cryptography.

Coinbase recently formed an independent advisory board to assess quantum-related risks to digital assets.

Coinbase said the group will operate separately from management and aims to publish public research by early 2027.

The debate intensified after Jefferies removed Bitcoin from its flagship portfolio, citing long-term security uncertainties.

There will be no material quantum risk over the next decade, as the technology remains at a very early stage,”

Adam Back said.

Back added that even partial cryptographic breakthroughs would not allow Bitcoin to be stolen, as protocol upgrades would likely occur first.

Derivatives markets reflected the growing anxiety, with the BTC options delta skew jumping to 17% on Friday.

The reading marked the highest level in more than a year and signalled extreme fear among options traders.

In neutral conditions, put options usually trade at a premium of 6% or less over calls, highlighting how unusual current pricing has become.

Around $860 million in leveraged long BTC futures positions were liquidated between Thursday and Friday.

Despite the liquidations, total BTC futures open interest fell to $46 billion, down from $58 billion three months earlier.

Analysts noted that declining leverage can indicate a healthier market after excess risk is flushed out.

Attention has shifted to stablecoin demand in China as a gauge of broader risk appetite.

Stablecoins typically trade at a 0.5% to 1% premium to the US dollar–yuan rate during strong demand periods.

A current 0.2% discount suggests moderate outflows, though this improved from a 1% discount recorded last week.

Bitcoin derivatives now reflect a cautious stance after a 13% price decline over the past 14 days.

Market participants said a recovery towards $87,000 may depend on easing macroeconomic and geopolitical pressures driving demand for cash and short-term US Treasuries.

At the time of reporting, Bitcoin price was $84,048.29.