Data from TradingView shows Bitcoin briefly dipping to $87,600 on Coinbase, marking its lowest level in nearly two weeks. Although prices rebounded toward $89,000 shortly after, the sudden move reinforced a pattern of sharp weekend declines that traders have grown accustomed to in recent weeks.

Bitcoin Slides to Two-Week Low as Volatility Returns

The dip to $87,600 represents Bitcoin’s weakest price action since early December, when the asset was recovering from a deeper pullback toward $84,000. Despite the brief nature of the decline, the move unsettled short-term traders and triggered renewed discussions around downside risk.

Weekend volatility has become increasingly common, particularly during periods of thin liquidity. As a result, even modest selling pressure can push prices lower quickly before buyers step back in.

At the time of writing, Bitcoin had managed to reclaim ground above $89,000. However, traders remain cautious, watching whether the recovery can hold into the new trading week.

Saylor Signals Another Strategy Bitcoin Purchase

Amid the price drop, Michael Saylor posted a familiar message on X, writing “Back to More Orange Dots” alongside a portfolio chart. The phrase has become widely associated with Strategy’s Bitcoin accumulation strategy.

According to SaylorTracker data, Strategy’s most recent Bitcoin purchase occurred on Dec. 12, when the firm acquired 10,624 BTC. That transaction marked its largest buy since late July, reinforcing the company’s long-term conviction.

Strategy currently holds approximately 660,624 BTC, valued at around $58.5 billion based on current market prices. With an average acquisition cost of $74,696 per coin, the firm remains comfortably in profit despite recent market turbulence.

Japan Rate Expectations Fuel Selling Pressure Debate

Some analysts believe the renewed selling pressure may be linked to expectations surrounding the Bank of Japan’s upcoming interest rate decision. Market participants are increasingly focused on Japan’s role in global liquidity conditions.

Analyst NoLimit warned that Japan’s previous rate hikes have coincided with sharp Bitcoin corrections. They highlighted Japan’s position as the largest holder of U.S. debt, suggesting that shifts in its monetary policy can ripple across global risk assets.

Polymarket data currently assigns a 98% probability to a 0.25% rate hike by the Bank of Japan later this week. This expectation has fueled concerns about a potential carry trade unwind.

However, not all analysts agree. Sykodelic argued that markets have already priced in Japan’s move, emphasizing that prices tend to react ahead of known events rather than after they occur.

Justin d’Anethan of Arctic Digital echoed this view, suggesting Bitcoin may remain range-bound between $80,000 and $100,000. According to d’Anethan, traders are now waiting for a stronger catalyst to break the current consolidation phase.

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Short-Term Volatility and Skew Analysis

The 25-delta skew in the options market, which reflects the gap between downside protection demand and upside expectations, remains negative and continues to rise. Short-term skew in 1-week and 1-month maturities stands at roughly 12.5 percent and 10 percent.

These figures show that investors are prioritizing downside protection rather than betting on upward moves. BTC options also appear fairly priced, meaning implied and realized volatility remain close. This environment offers opportunities for investors holding options to profit from price swings.

Put Demand and Dealer Hedging Behavior

Recent flows show strong dominance from put buyers seeking downside protection. Dealers hedge the risk of selling put options by shorting Bitcoin futures to offset potential losses. If the spot price continues falling, hedging activity will intensify and amplify market volatility.

Investors are particularly targeting 95,000-dollar put options, whose premiums are climbing rapidly, signaling a cautious market tone. Glassnode data confirms the sustained demand around this level.

Market Trends and Strategy Insights

Short-term volatility is rising. Put demand is dominant, and dealer hedging behavior reinforces market turbulence. The options market appears to be preparing for near-term turbulence. Investors can use these dynamics to protect portfolios and capture short-term opportunities. Securing protection against sharp price swings has become increasingly important.

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The post Glassnode: Bitcoin Options Signal Rising Downside Risk appeared first on Coin Engineer.