[Digital Today reporter Yoonseo Lee] Demand for downside protection in the bitcoin options market has surged to the highest level in a year, heightening caution that bitcoin could test the $55,000 level again.

On June 29 (local time), Cointelegraph reported that bitcoin has failed to regain the $61,000 level since June 26. The market is taking rising demand for downside hedges and a trend of outflows from spot bitcoin exchange-traded funds (ETFs) as bearish signals.

In the options market, bearish sentiment was confirmed in the numbers. On Deribit on June 27, premiums paid for bitcoin put options totaled $115 million, 7 times the $16 million in call-option premiums. The imbalance is the highest level in a trend that has persisted for more than 12 months.

Still, it is hard to conclude that increased options demand alone has strengthened bears’ conviction. The market is increasing defensive positions as bitcoin fails to settle above $60,000, but there is also a view that this does not necessarily translate into aggressive bets on a decline. A retest of $55,000 cannot be ruled out, but there is a note that rising downside hedge demand should not be directly equated with an expansion of bearish views.

Strategy’s financial issues were also cited as weighing on investor sentiment. Investors feel burdened about whether Strategy can meet its dividend payments and handle debt maturing in 2027. Strategy said on June 29 it had secured an additional $1.2 billion in cash through a recent share sale and separately earmarked $1.25 billion worth of bitcoin as an asset that could be sold in the future.

The move eased some short-term liquidity concerns but, on the other hand, fueled anxiety about bitcoin supply and demand. Even if no actual sale occurs in the coming days or months, the market sees little incentive for Strategy to issue additional MSTR shares as it has secured dividend resources for the next 17 months. That leaves room for its bitcoin holdings to be seen as potential supply.

In contrast, sentiment in U.S. equities improved. After a 60-day ceasefire agreement between the United States and Iran, international oil prices fell to their lowest in 4 months, easing inflation pressure, and U.S. stocks showed a recovery in risk appetite. Goldman Sachs forecast annual profit growth at S&P 500 companies would reach 22%. Concerns about the burden of high valuations also eased somewhat.

Flows also tilted toward technology shares. The Kobayashi Letter, an analytics firm, said it analyzed that retail investors appeared to be pulling out of gold and bitcoin and moving into semiconductor stocks. By Bloomberg tallies, semiconductor ETFs have seen cumulative inflows of more than $20 billion, while the iShares Semiconductor ETF has risen 81% and the VanEck Semiconductor ETF has gained 60%.

The opposite trend continued in spot bitcoin ETFs. U.S.-listed spot bitcoin ETFs posted net outflows for 7 straight weeks. The trend dampened expectations of a strong rebound after a low of $58,050 on June 25. Regardless of whether the selling is driven by flows into tech stocks, the continued large net outflows from spot ETFs are being read as a signal that improving investor sentiment will not be easy.

Ultimately, the market is watching two things at the same time. One is the increase in defensive demand confirmed in the options market, and the other is money leaving spot ETFs. As Strategy’s liquidity response eases short-term unease while leaving concerns about potential supply, the view is gaining strength that bitcoin will struggle to regain a move to settle above $60,000 in the near term. The focus is on whether spot ETF flows reverse and whether bitcoin can reclaim the $60,000 level and turn it into support.

Retail investors appear to be rotating out of gold and Bitcoin into semiconductor stocks: Since April, US gold and Bitcoin ETFs have posted -$12 billion in cumulative outflows. Over the same period, US semiconductor ETFs have attracted +$20 billion in cumulative inflows. This… pic.twitter.com/VHuDTB0nyN