[Analysis] "Bitcoin breaks below $69,000…derivatives market steps up downside hedging"

An analysis suggests that as Bitcoin fell below the $69,000 level, market structure is tilting toward the bearish side.

On the 22nd (local time), 10x Research said in a recent report, "Bitcoin has broken below $69,000. A break of this level is not mere volatility but a signal of a shift in market positioning," adding that "investor responses in the derivatives market are changing rapidly."

In the futures market, long positions are being liquidated, driving funding rates sharply lower into negative territory. At the same time, in the options market, demand for downside protection has surged, expanding put-option–led trading.

Volatility indicators are also rising. Short-term implied volatility has climbed to the mid-60% range, and skew has remained negative, reflecting that demand to brace for declines is outweighing upside bets.

The report assessed that "the market has shifted from a phase expecting a breakout above $75,000 to a stage of preparing for heightened uncertainty and volatility."

The macro backdrop is also cited as an overhang. While the market has begun to price in some probability of rate hikes, the Federal Reserve (Fed) is still maintaining a rate-cut stance, widening the gap between policy expectations and the actual direction, it said.

Concerns were also raised that if a sharp jump in oil prices leads to an economic slowdown, it could weigh on risk assets broadly.

While inflows through Bitcoin spot exchange-traded funds (ETFs) are holding up, the analysis said that as bearish signals in the derivatives market intensify, a break below key support levels could accelerate downside momentum in the near term.