Following the biggest crypto liquidation in history, traders are loading up on protective options to guard against another downturn in bitcoin and ether, as volatility surges across digital asset markets.
Over $19 billion in leveraged positions were wiped out on Friday after Donald Trump’s announcement of 100% tariffs on Chinese imports triggered panic selling and cascading liquidations. The sell-off marked the largest 24-hour wipeout ever recorded, dwarfing both the March 2020 crash and FTX’s 2022 collapse.
Bitcoin dropped more than 14% to $104,782, while ether fell over 12%. Although both have since rebounded, traders are bracing for further downside. Data from Derive.xyz shows heavy demand for put options at $115,000 and $95,000 strikes for bitcoin and $4,000 and $3,600 for ether, signaling deepening bearish expectations into December.
“Volatility jumped across all maturities — investors are worried about more downward turns,” said Sean Dawson, head of research at Derive.xyz. Analysts noted that short-term optimism quickly reversed as traders shifted from call buying to call selling around the $125,000 strike, reflecting waning confidence in a quick recovery.
Despite the crash, on-chain metrics suggest bitcoin’s investor base remains resilient. Analyst Willy Woo said institutional holders appear to be holding steady, while capital exits from altcoins are likely rotating into bitcoin rather than leaving the market.
Still, experts caution that after the reset in leverage, bitcoin must break key resistance levels to retest new highs. “The crash cleared excessive risk, but the path to recovery will be challenging,” said Nic Puckrin of The Coin Bureau.
