Middle East conflict and stagflation concerns squeezed Bitcoin, hitting a two-week low, with the options market shifting into a "defensive posture"

Bitcoin hits a more than two-week low as market traders switch to defensive mode after the largest options expiration of the year. By the number of open contracts, around $14 billion in Bitcoin options are set to expire this Friday. As the quarterly contract expiration approaches, the ongoing conflict in the Middle East for nearly a month raises questions on whether a ceasefire will come, with conflicting signals in the market. Griffin Ardern, co-founder of the multi-asset management firm Primal Fund, stated that based on traders' positions, the market seems to be betting on prolonged conflict, potential inflation risks, and "forced rate hikes", leading to a significant increase in bearish sentiment. According to data compiled by Deribit, the highest open contracts are concentrated in put options with a strike price of $60,000. Traders typically use put options (which give the holder the right to sell the underlying asset at a specified price) to hedge against downside risks. In the past 24 hours, the put/call ratio for Bitcoin options rose to 1.3, indicating a significant increase in demand for hedging against downside risks before the weekend. Bitcoin fell by as much as 4% during the session, hitting a low of $66,223, the lowest since March 9. The mainstream cryptocurrency has been fluctuating between $60,000 and $75,000 recently, significantly lower than its historical high of around $126,000 before the market crash in October last year. Pratik Kala, portfolio manager at the digital asset hedge fund Apollo Crypto, stated, "With the factors of options expiration landing, the anchoring effect of prices has faded, and the market is now showing its true direction."