Two Leading Indicators Flash Warning Signs as Bitcoin Sentiment Turns Uneasy

The Bitcoin market is facing dual pressures. Data from the options market shows a surge in demand for put options, with traders willing to pay higher premiums to hedge against downside risks. Meanwhile, Bitcoin miners deposited approximately 51,000 Bitcoins into exchanges over the past week, marking the largest such movement in several months, potentially in preparation for potential sales. 'When miners begin to sell, the market usually does not fare well.'

Amid recent sharp fluctuations in Bitcoin prices, two key leading indicators from the options market and on-chain activities of miners are issuing increasingly strong warning signals.

The latest market developments show that traders are preparing for potential further downside risks. According to a report by Cointelegraph today, a key indicator in the Bitcoin options market, the 'delta skew,' has climbed above 10%, indicating that professional traders are purchasing put options at a premium. This is typically seen as a classic signal of bearish market sentiment.

Meanwhile, the movements of miners have also raised market concerns. According to CryptoQuant data, since October 9, miner addresses have deposited approximately 51,000 Bitcoins into Binance exchange. This represents the largest inflow to exchanges since July and, historically, such actions often precede price weakness.

The simultaneous deterioration of these two indicators has directly led to a rise in market risk aversion and posed a severe test to Bitcoin's price support levels. Bitcoin's price fell to $107,600 on Thursday.

Options market flashes red as bearish bets surge

Data from the derivatives market clearly reflects growing concerns among traders.

Data from laevitas.ch shows that the 30-day Bitcoin options delta skew indicator, which measures professional trader sentiment, has risen above 10%, significantly higher than the neutral range of -6% to +6%. This indicates that market participants are willing to pay higher costs to purchase put options to hedge against the risk of a price decline.

Moreover, the demand for downside protection strategies is evidenced by trading volumes. According to reports, the trading volume of put options on the Deribit exchange was 50% higher than that of call options on Thursday, with this indicator climbing to its highest level in over 30 days.

This marks an accumulation of market pressure, as cryptocurrency traders are typically optimistic, and the normal readings of the put/call ratio tend to be lower.

Massive Miner Transfers: Historical Indications Point to Selling Pressure

In addition to signals from the derivatives market, the activities of one of the most critical participants in the Bitcoin ecosystem—miners—have added uncertainty to the market.

Data from CryptoQuant shows that miners transferred 51,000 Bitcoins, valued at over USD 5.7 billion, to Binance exchange within seven days starting October 9. Notably, on October 11 alone, miners deposited over 14,000 Bitcoins to Binance, which occurred the day after the recent 'crypto market crash.' This scale also marked the largest movement since July of last year.

CryptoQuant noted in its Thursday report that when miners transfer Bitcoin from wallets used for storage or mining to trading platforms, it typically indicates they may be preparing to sell or hedge their positions.

The report emphasized that although these transfers may also be for other reasons such as collateralization, financing, or operational needs, historical experience suggests that when miners begin selling, the market usually does not fare well.

This shift in sentiment from 'holding' to 'selling' has historically exerted downward pressure on Bitcoin prices and often served as a precursor to significant price corrections.