Bitcoin slumps with options showing traders turning defensive

Bitcoin has been stuck in a range since the conflict in Iran began in late February, at one point jumping to a high of nearly US$76,000 before tumbling. Photo by Suhaimi Abdullah/Bloomberg

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Bitcoin fell to its lowest level in more than two weeks as traders turned defensive following the year’s largest options expiry, while investors continued pulling money from crypto exchange-traded funds.

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The original cryptocurrency fell as much as 4.3 per cent to US$65,997, the lowest since March 9. The token has been stuck between roughly US$60,000 and US$75,000 in recent weeks, drifting well below its October 2025 peak of around US$126,000.

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Roughly US$14 billion of Bitcoin options expired Friday, as measured by the number for outstanding contracts, known as open interest. The quarterly rollover comes amid conflicting signals on the prospect of a halt to the nearly month-long war in the Middle East.

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Looking at traders’ positions, they seem to be anticipating a prolonged war, potential stagflation, and “forced rate hikes,” leading to a significant increase in bearish sentiment, said Griffin Ardern, co-founder of multi-asset manager Primal Fund.

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“With the expiry behind us, the price pin has faded, and the market is beginning to show its true directional intent,” said Pratik Kala, a portfolio manager at Apollo Crypto, a digital-asset hedge fund.

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The highest open interest is now concentrated in US$60,000 puts, according to data compiled by Deribit. Traders often use puts – which give the holder the right to sell  the underlying asset at a specific price – to hedge against declines. The put/call ratio over the past 24 hours stands at 1.3, indicating increased demand for downside protection heading into the weekend.

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In the past 24 hours, about US$450 million in liquidations were seen, according to data compiled by Coinglass.

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Meanwhile, Wall Street traders drove global stocks and bonds lower ahead of the weekend on concern that a protracted war in Iran will keep oil prices elevated, fuelling an increase in inflation and a slowdown in growth. The drop in equities put the S&P 500 on course for its longest streak of weekly losses since 2022. The Nasdaq 100 fell into correction territory after a 10 per cent decline from its peak. Brent hovered near US$111 as traders braced for the conflict to stretch into April as attacks continued across the Middle East.

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Bitcoin has been stuck in a range since the conflict in Iran began in late February, at one point jumping to a high of nearly US$76,000 before tumbling. A credible ceasefire could push Bitcoin above US$75,000, triggering further gains as bearish positions are unwound, said Andreja Cobeljic, head of derivatives trading at AMINA Bank.

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While March has seen about US$1.4 billion of net inflows into Bitcoin ETFs — a stabilization after four straight months on net outflows — those allocations have proven sensitive to macro shifts. Investors withdrew $171 million from spot ETFs on Thursday, data compiled by Bloomberg show.