Mohamed Manae

Trade with caution.
The final stage of stress, where conditions are forming but the signal hasn't yet been triggered, is approaching a crucial turning point for long-term investors.
However, history suggests that the final stage of the cycle is not yet complete.
In previous cycles, Bitcoin market bottoms only formed after long-term investors had incurred unrealized net losses—a stage where their convictions were tested and capital came under constant pressure.
These bottoms typically lasted between 6 days (as in the 2020 crash) and 277 days.
In the current cycle, we are witnessing a rapid decline in profitability.
Since the peak on October 6, 2025, long-term investor profitability has plummeted from 58% to just 3% in 142 days.
This sharp and rapid decline reflects a significant deterioration in investor positions and sentiment.
Yet, despite this downturn, long-term investors' adjusted net profit/loss remains slightly above zero.
And that is what matters most.
This suggests that despite the heightened stress level, the group has not yet entered the broad capitulation zone historically required to form sustained market bottoms.
In other words, capital is uncomfortable, but not yet forced into losses.
This distinction is important.
Market bottoms don't just form when investors are under pressure; they form when investors are in a precarious position after watching their accumulated gains evaporate completely and their positions turn into losses.
Until the LTH-NUPL indicators decisively move into negative NUPL territory, the probability of an early bottom remains high.
The current environment resembles a late stress phase, not a complete capitulation.
The opportunity is forming, but the signal hasn't been triggered yet.
🧐What to watch:
Watch for a sustained move of the LTH-NUPL indicator below zero, accompanied by a prolonged decline in price and volatility.
This would indicate forced stress and a potential capitulation, conditions that historically correspond to asymmetric entry points.
Over 40% of alternative cryptocurrencies are nearing all-time lows.
This percentage is even higher than that recorded during the previous bear market, which peaked at around 38%.
However, when such extremely low performance emerges, it can create very attractive investment opportunities.
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@Bastoman

What does this mean for the crypto market?
1️⃣ Open Interest Reset:
Following today's expiration, open interest for Bitcoin options contracts saw a sharp drop from approximately 550,000 contracts to 320,000 contracts.
What this means:
The market is now in a "rebuilding" phase, where traders will begin opening new positions reflecting their current sentiment and future expectations.
2️⃣ Volatility Back to Range High:
Implied volatility (ATM) has risen from the 48-50% range to the mid-50s.
Why is this significant?
1- This increase reflects a surge in demand for options, indicating that the market anticipates larger price movements in the near future.
2- As Bitcoin's momentum slows, volatility returns to its higher levels, opening the door to profitable trading opportunities.
3️⃣ Increased Put Demand Rebuilds:
The skew has returned to the top of its monthly range at 16%, reflecting renewed demand for put options.
What's happening?
1- The market is showing concerns about short-term price weakness.
2- Traders are preferring to hedge against downside rather than bet on price rises, reflecting a clear sense of caution in the market.
4️⃣ Asymmetric Flow Dynamics:
Over the past two weeks, activity has been heavily driven by put option flows, accounting for 65.8% of the activity.
What does this mean?
1- Some traders are selling put options to profit from downside volatility, while others are taking aggressive positions in anticipation of further declines.
2- This dynamic indicates that the market is experiencing a period of caution and tension, with a strong focus on the downside.
5️⃣ Limited Impact of Short Gamma:
Despite the short gamma channel, the post-expiration impact was limited. Critical Range:
1- The 64K-68K range contains approximately $1.5 billion of short gamma, which could lead to high volatility within this range.
2- This means that prices could see active movement within this framework, creating opportunities for active traders.
6️⃣ Strong Demand for Put Options at 65K (65K Put Bid Strengthens):
Put options at the 65K level saw strong demand after the 75K level was rejected.
What does this reveal?
1- Buyers continued to strengthen their positions even as the price moved back towards 70K, reflecting continued caution in the market.
2- The market is showing readiness to cope with weaker days ahead.
💡 Summary
1️⃣ Open interest fell sharply after expiration.
2️⃣ Implied volatility returned to its higher levels.
3️⃣ The divergence reflects increased demand for put options.
4️⃣ Flows are dominated by bearish activity.
5️⃣ Short Gamma remains confined to a defined range.
6️⃣ Positions show clear caution amidst weak prices.
Share your opinion:
What is your strategy for dealing with these fluctuations?
Do you see a buying opportunity, or is caution the better option?
Let us know in the comments 👇
Tip:
Always follow options data and market analysis to stay informed about the latest trends.
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@Bastoman