Key Takeaways:
Bitcoin fell 0.8% to $62,400 as traders loaded up on bearish put options and concerns over Strategy's preferred stock deepened.
"Either sell an enormous amount of BTC and MSTR to help bring STRC back near par, or continue to watch every part of your cap structure melt because of the uncertainty you've created," Jeff Dorman, chief investment officer at Arca, said on X.
Deribit saw heavy buying of short-dated put options spanning expirations from June 22 to July 31, including 540 contracts of July 10 $55,000 puts and 314 contracts of July 31 $52,000 puts, according to Laevitas data. Long liquidations wiped out roughly $400 million over 24 hours, feeding additional selling pressure. The total crypto market cap slipped 0.35 percent to $2.13 trillion, extending a slide that began June 15.
If Bitcoin loses the $61,725 support level — the 0.236 Fibonacci retracement — a deeper correction toward $58,253 and potentially $52,640 could follow. A reclaim of $67,337 would restore a bullish structure.
Why the selling pressure is building
The selloff traces to a hawkish shift from the Federal Reserve. New Chair Kevin Warsh held rates on June 17 but dropped the easing bias, with nine of 18 officials now projecting a rate hike in 2026. The stronger dollar and rising real yields have weighed on risk assets across the board, and Bitcoin has not been immune.
Strategy's preferred stock, STRC, has compounded the caution. The shares fell below their $100 par value to record lows, complicating the company's ability to raise capital for further Bitcoin purchases. While Strategy has not sold any of its roughly 226,000 BTC, the risk is sentiment-driven: if the company's equity funding channel narrows, the market may price in a scenario where it eventually becomes a seller.
Options market signals deeper downside risk
The put buying on Deribit is notable for its concentration in out-of-the-money strikes. A put option gives the buyer the right to sell Bitcoin at a predetermined price, and the rush to secure downside protection at levels as low as $52,000 suggests traders are hedging against a sustained selloff rather than a short-term dip.
Bitcoin's 24-hour trading volume has climbed as sell orders accelerated, while open interest on futures has declined as leveraged positions unwind. The combination of falling price and declining open interest typically signals that the move is driven by long liquidation rather than fresh short selling — a pattern that can exhaust itself once the leveraged crowd is flushed out.
For now, Bitcoin must hold above $61,725 to avoid accelerating toward the next major support at $58,253. A break below that level would open the door to $52,640, a price last seen during the August 2024 selloff. On the upside, a move back above $67,337 would signal that the correction has run its course.
This article is for informational purposes only and does not constitute investment advice.
