"Extreme fear territory": traders bet on bitcoin collapse to $80 thousand.

Bitcoin's value fell below $90,000 in trading on Nov. 18 for the first time in seven months, exacerbating a sell-off that wiped out all gains in 2025. In the options market, traders have become increasingly pessimistic bets. They are convinced that the fall of the largest cryptocurrency is far from over. But there are also those who consider what is happening as a good opportunity to invest in bitcoin.

Demand for bitcoin downside protection - especially at the $90k, $85k and $80k levels - has surged. Especially high activity is observed in protective options with expiration at the end of November. Traders have bought up such contracts for more than $740 million. This volume significantly exceeds the interest in "bullish" positions, Bloomberg writes, citing data from the site for trading cryptocurrency derivatives Deribit.

The sentiment index from analytics platform CoinMarketCap indicates that crypto market participants are in a state of "extreme fear." The sector is now crowded with investors who are too deep in the negative to buy more, but are not yet ready to lock in losses, Bloomberg states.

"The Fed and talk of an artificial intelligence bubble are the two main headwinds for cryptocurrencies and risk assets ahead of year-end," argues Kaiko analyst Adam McCarthy. According to him, AI-related risks are intensifying and negatively impacting sentiment in the crypto sector; together with the US Federal Reserve's cautious rhetoric, this forms a steady downtrend for bitcoin.

Bitcoin dynamics act as a "leading indicator" for the U.S. stock market, eToro analyst Bret Kenwell told CNBC. According to him, if the cryptocurrency's decline accelerates, U.S. stocks are also likely to fall deeper into the red zone.

Although the crypto market is in "extreme fear territory," investors have not lost interest, according to Kevin Kelly, portfolio manager of Amplify cryptocurrency exchange-traded funds (ETFs). According to him, it is normal to see a "digestion period" after bitcoin's sharp rise from the lows of early 2023. That said, historical experience shows that the market entering a zone of "extreme fear" is a good time to invest in bitcoin, Kelly added.

Strategy, the largest corporate holder of bitcoins, just bought another $835 million worth of them. However, other cryptocurrencies are being forced to sell their assets to protect their balance sheets - and these sales are adding to the psychological pressure, Bloomberg notes. Market sentiment is also being pressured by larger economic forces: increased talk of a bubble in the AI industry and cautious rhetoric from the U.S. Federal Reserve reduce investors' appetite for risk.

This article was AI-translated and verified by a human editor