As July draws to a close, the open interest structure in the Bitcoin options market has shifted significantly. Deribit data shows that Bitcoin put options with a strike price of $60,000 have become the contracts with the highest open notional value on the platform, reflecting traders' increased focus on downside protection ahead of August.

These types of put options are typically used to hedge against the risk of a price pullback. Bitcoin briefly dipped below $60,000 last month before rebounding above $63,000. The price rebound did not lead to further increases in bullish bets; instead, it fueled defensive positions.

$60,000 put options rise to the top spot

As of press time, the notional value of open interest in $60,000 put options was approximately $1.17 billion. In contrast, the open interest in $70,000 and $72,000 call options, which were among the top open interest the previous day, has declined significantly.

Ahead of the Federal Reserve's interest rate decision, the market saw a surge in buying of these two high-strike-price call options, betting that Bitcoin would continue to rise after the rate decision, potentially even reaching around $72,000. However, this trend did not materialize.

Bullish positions fell after the Fed meeting

Following the expiration and settlement at 08:00 UTC on Friday, related bullish positions decreased significantly. CoinDesk, citing data, reported that the total value of Bitcoin and Ethereum options involved in this expiration was approximately $10 billion.

• The notional value of open call options worth $70,000 fell to $943 million.
• The notional value of open call options worth $72,000 fell to $888 million.
• The notional value of open interest in $60,000 put options is approximately $1.17 billion.

This means that the bullish positions previously established by the market in anticipation of the Fed meeting were not extended upon expiration, and funds were more inclined to retain protection against a downside.

Historical data shows that August is typically a weak month.

In addition to changes in holdings, seasonal data is also reinforcing cautious sentiment. CoinDesk data shows that since 2013, Bitcoin's median return in July has been 8.61%, while this July's increase is approximately 8.9%, largely consistent with historical performance.

However, historically, after a positive July, August tends to be weaker. Since 2013, Bitcoin's median August return has been -7.51%. This is another reason why market sentiment is turning cautious.

The median better reflects typical performance for most months because it is not significantly affected by a few months of extreme price fluctuations, unlike the average. For the highly volatile Bitcoin, this metric is more suitable for observing seasonality.

Overall, the focus of options positions has shifted from high-strike-price call contracts to $60,000 put protection, indicating that market expectations before August had shifted from chasing gains to a defensive stance.