As Bitcoin prices show signs of stabilization, traders are increasingly investing in downside protection, reflecting a cautious sentiment in the market. According to a recent report by VanEck, the put/call open interest ratio has surged to 0.84, the highest level since June 2021, indicating that investors are willing to pay a premium for insurance against potential losses.
The report reveals that Bitcoin’s 30-day average price has dropped by 19% compared to the previous period, while realized volatility has decreased significantly from 80 to just above 50. This decline in volatility suggests a cooling of leveraged speculation, with futures funding rates also easing from 4.1% to 2.7%.
Investors have spent approximately $685 million on put options over the last month, while call premiums have fallen by 12% to around $562 million. The report notes that put premiums have reached an all-time high relative to spot volume, peaking at roughly 4 basis points, which is three times the levels seen in mid-2022 during significant market downturns.
“Relative to spot volume, put premiums reached an all-time high of roughly 4 basis points, roughly 3x the levels seen in mid-2022 following the Terra/Luna stablecoin collapse and the Ethereum staking liquidity crisis,” the report states.
This heightened demand for put options indicates that investors are preparing for potential downturns, a sentiment that has historically preceded significant price recoveries. VanEck’s analysis suggests that similar market conditions in the past six years have led to average Bitcoin gains of 13% over 90 days and an impressive 133% over 360 days.
Despite the defensive posture of traders, on-chain activity remains subdued, and miner selling appears to be contained. This lack of activity could contribute to the cautious market environment.
In related news, a strategy firm has reported substantial Bitcoin purchases in the first quarter of 2026, acquiring 89,618 BTC so far, the highest quarterly total since late 2024. This brings their total holdings to 761,068 BTC, with the quarter still ongoing and potential for further acquisitions.
- The firm’s purchases this year have exceeded those of any quarter since Q4 2024, when they added 194,180 BTC as prices surged to $100,000.
- With two more Mondays remaining in the quarter, additional purchases could still take place.
Bitcoin traders are increasingly seeking downside protection as prices stabilize, with a notable rise in the put/call open interest ratio. Historical trends suggest that this cautious sentiment could precede significant price recoveries in the coming months.