The price of Bitcoin plummeted in the last 24 hours, falling below the $89,000 mark, while a mysterious options trading list indicates that someone seemed to be prepared before this sharp decline. On January 29, Eastern Time, Bitcoin's price retreated from a high of $90,600, briefly dropping below the $88,000 mark, with the overall cryptocurrency market showing red.
Coinbase's stock price fell for the seventh consecutive trading day, closing down 0.7% at $209.43, with after-hours trading further declining by about 0.3%.
As market pessimism spreads, Benzinga's options scanner detected 16 unusual Coinbase options trades, with put options accounting for 50%, far exceeding the normal trading ratio.
1. Market Performance
● Last night, the crypto market experienced a comprehensive sell-off. Bitcoin's price retreated from a high of $90,600, briefly falling below the $88,000 mark. The broader CoinDesk 20 index dropped 2.9%, indicating overall market weakness.
● Meanwhile, traditional safe-haven assets performed strongly. Gold prices surged to a historic high of over $5,500 per ounce, and silver continued its upward trend, reaching $117 per ounce. Funds are flowing from higher-risk digital assets to traditional safe-haven assets, a trend that is particularly evident amid increasing macroeconomic uncertainty.
● As the largest cryptocurrency trading platform in the U.S., Coinbase's stock performance is highly correlated with the cryptocurrency market. The company's stock price has fallen for the seventh consecutive trading day, closing at $209.43.
2. Multiple Pressures
The recent pullback in the crypto market is not an isolated event but rather the result of multiple macro factors at play.
● The Federal Reserve has kept the federal funds rate unchanged between 3.5% and 3.75%. Although this decision has been priced in by the market, the Fed's hawkish stance still puts pressure on risk assets. Senior market analyst Samer Hasn noted: “High interest rates and rising macro uncertainty make funds more inclined to flow into defensive assets.”
● The risk of a potential government shutdown in the U.S. has heightened market concerns. Funding for several federal agencies will expire at midnight on January 30, and if Congress fails to pass a new budget before then, some government departments may enter a "shutdown" state starting January 31.
● Geopolitical tensions are also affecting market sentiment. U.S. military deployments in the Middle East have escalated tensions, further driving funds into traditional safe-haven assets like gold.
3. Derivatives Signals
Several indicators in the derivatives market show that traders' risk tolerance for the crypto market has significantly decreased.
● The cumulative nominal open interest in all crypto futures has decreased by nearly 3%, falling to $132.26 billion. Positions worth $348.3 million in crypto futures have been liquidated, with the number of liquidations increasing by 13% within 24 hours.
● Despite the price declines of Bitcoin and Ethereum, their 30-day implied volatility index remains close to multi-month lows. This indicates that traders expect the market to remain relatively calm rather than enter a state of panic.
● In the options market listed on Deribit, market sentiment remains cautious, with Bitcoin and Ethereum put options trading at a premium compared to call options. Large trades include Bitcoin call spreads and Ethereum put calendar spreads, both of which aim to profit from low volatility.
4. Unusual Trading
● Just before the market crash, unusual options trading activity was observed in Coinbase. Benzinga's options scanner identified 16 uncommon Coinbase options trades.
● The overall sentiment of these trades is divided into 25% bullish and 50% bearish, showing a clear pessimistic tendency. Specifically, the trades included 5 put options totaling $484,807 and 11 call options totaling $1,189,606.
● Unusual activity in the options market often indicates that large funds are betting in a specific direction. When such trades cluster, it typically means “someone knows something is about to happen.” Notably, these unusual trades occurred just before the market crash, raising questions about insider information.
5. Short Selling Pressure
● Short selling pressure on Coinbase is increasing. Data shows that short interest in Coinbase Global Inc has risen 7.89% since the last report. Currently, 17.3 million shares of Coinbase stock are sold short, accounting for 7.66% of all tradable common stock. Based on trading volume, traders would need an average of 2.51 days to cover these short positions.
● Compared to its peers, Coinbase's short interest is significantly higher. The average short interest among its peers is 5.86%, while Coinbase stands at 7.66%.
● The increase in short interest reflects growing pessimism among investors regarding Coinbase's prospects, which may be related to the overall weakness in the cryptocurrency market and increasing regulatory pressures.
6. Regulatory Pressure
● Coinbase is facing increasing regulatory pressure. The UK's Advertising Standards Authority has banned a Coinbase advertising campaign that was accused of implying that cryptocurrency could alleviate cost-of-living pressures while minimizing the associated risks.
Coinbase has expressed opposition, stating that it fundamentally disagrees with the regulator's view and insists that the advertisement was not intended to provide a "simple solution."
● In Washington, discussions around the regulatory framework for cryptocurrencies are ongoing. The industry-supported political group Fairshake reports that it has over $193 million in available cash ahead of the 2026 midterm elections, with Coinbase donating $25 million.
● Fairshake spokesperson Josh Vlasto stated: “Now is the time to protect consumers.” Discussions on the market structure bill are still ongoing, which aims to determine whether the SEC or CFTC will regulate the main areas of cryptocurrency.
7. Outlook
● The short-term outlook for the crypto market remains uncertain. Bitwise Chief Investment Officer Matt Hougan noted that with gold prices rising above $5,000 and the unclear prospects for U.S. crypto regulatory legislation, digital assets are at a critical juncture.
● Analysts generally believe that Bitcoin may continue to face volatility pressure until risk aversion dominates and liquidity improves significantly. The market is waiting for new catalysts to emerge, possibly in the form of policy changes or improvements in the macroeconomic environment.
● Federal Reserve Chairman Powell's term ends in May, and Trump is expected to nominate a successor next week. The new central bank head may adopt a more dovish policy stance than Powell, which could positively impact the crypto market.
● CF Benchmarks research director Gabe Selby stated: “The positive factors driving Bitcoin up in the short term still exist, but these factors are increasingly leaning towards the political rather than monetary policy.”
Data from the options market indicates that someone seemed to be prepared before the market crash: of the 16 unusual Coinbase options trades, half were put contracts.
Meanwhile, Coinbase's stock price has fallen for seven consecutive trading days, and short interest continues to rise. Gold prices have surpassed $5,500 per ounce, setting a historic high, while Bitcoin struggles below $89,000.
The market is awaiting Coinbase's earnings report on February 12, while regulatory discussions in Washington continue. In this turbulent crypto market, the only certainty is uncertainty, and all traders are trying to find direction amid the volatility.
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