Bitcoin briefly dropped nearly 7% following its historic surge past the $100,000 milestone, as traders moved swiftly to hedge against potential downside volatility. The pullback highlights growing caution in the crypto market despite bullish momentum driven by shifting regulatory expectations and high-profile political endorsements.
Market Volatility After Record Highs
On Friday, Bitcoin dipped to as low as $92,144, retreating from its psychological $100,000 breakthrough earlier in the week. By 9:22 AM Malaysia time, the leading cryptocurrency stabilized around $97,703. This sharp correction underscored the inherent volatility of digital assets, especially during pivotal price milestones.
The broader cryptocurrency market echoed Bitcoin’s movement, with major altcoins also experiencing pullbacks. Momentum from optimism surrounding U.S. President-elect Trump’s pro-crypto appointments appeared to pause temporarily as investors recalibrated their positions.
👉 Discover how market sentiment shifts during major crypto milestones.
Rising Demand for Bearish Protection
Data from Amberdata revealed a notable increase in demand for put options—financial instruments used to profit from or hedge against price declines. Over the past 24 hours, the most heavily traded Bitcoin put options had strike prices at $95,000 and $100,000, indicating that traders are preparing for a potential reversal after the recent rally.
Additionally, interest grew in lower-strike puts ranging between $70,000 and $75,000, suggesting some market participants are bracing for deeper corrections if sentiment turns bearish.
Josh Gilbert, market analyst at eToro, noted:
“While there still feels like room for upside, profit-taking is entirely expected at this stage.”
He added:
“If we look back at previous cycles, it's not uncommon for Bitcoin to see drawdowns of 20% to 40% even within a bull market.”
This historical context reminds investors that sharp corrections are a natural part of Bitcoin’s price evolution—not necessarily signs of a collapsing trend.
Options Market Signals: Caution Amid Optimism
Luke Nolan, researcher at CoinShares, analyzed open interest trends across derivatives platforms and observed a concentration of put option positions expiring in December 2025, January 2025, and February 2025.
“When you break it down by expiry, you see put open interest peaking toward year-end and early next year,” Nolan explained. “This makes sense—when prices move sharply upward, hedging against pullbacks and unexpected moves becomes a priority.”
However, Deribit data showed that while bearish bets are rising, they remain dwarfed by call (bullish) option volumes expiring over the same period. This imbalance suggests that while caution is growing, long-term confidence in Bitcoin’s trajectory remains strong.
Breakthrough at $100,000: Catalysts Behind the Rally
Bitcoin’s climb above $100,000 during Thursday’s Asian trading session marked a watershed moment for the asset class. The surge followed growing optimism that cryptocurrency regulation in the United States may become more favorable under the incoming administration.
Market participants welcomed President-elect Trump’s announcement on Truth Social that David Sacks would be appointed as the White House lead for artificial intelligence and cryptocurrency policy.
Trump stated:
“He will help craft the legal framework so the crypto industry can thrive with clarity and grow right here in America.”
Sacks, a well-known tech entrepreneur and early advocate for digital assets, is viewed as a credible figure who could bridge the gap between Silicon Valley innovation and federal policymaking.
👉 Explore how regulatory developments influence crypto market trends.
Core Keywords Integration
Throughout this analysis, several core keywords naturally emerge based on search intent and topic relevance:
- Bitcoin price
- crypto market volatility
- hedging Bitcoin risk
- put options Bitcoin
- Bitcoin $100K milestone
- cryptocurrency regulation
- Bitcoin derivatives
- market correction
These terms reflect what users are actively searching for when tracking Bitcoin’s performance during record-breaking phases and periods of uncertainty.
Frequently Asked Questions
Q: Why did Bitcoin drop nearly 7% after hitting $100,000?
A: The decline followed profit-taking and increased hedging activity. Traders used put options to protect gains amid fears of a short-term pullback after the psychological milestone was reached.
Q: What are put options, and why are they important in crypto trading?
A: Put options give holders the right to sell an asset at a predetermined price. In volatile markets like crypto, they serve as insurance against downside risk or tools for speculative shorting.
Q: Is a 20–40% correction normal in a Bitcoin bull run?
A: Yes. Historical data shows that even during strong bull markets, Bitcoin often experiences significant drawdowns. These corrections are considered healthy for sustainable growth.
Q: How does U.S. regulatory news affect Bitcoin prices?
A: Positive regulatory signals—such as appointing crypto-friendly officials—boost investor confidence and institutional adoption, often triggering price rallies.
Q: Are traders still bullish despite the recent drop?
A: Yes. While hedging has increased, overall options data shows stronger open interest in call options, indicating that many expect further upside over the medium to long term.
Q: What role do derivatives play in Bitcoin price movements?
A: Derivatives like futures and options allow traders to hedge or speculate on price changes. Large shifts in open interest or funding rates can signal upcoming volatility or trend reversals.
Strategic Outlook: Balancing Risk and Opportunity
The recent price action reflects a maturing market where rapid gains are met with sophisticated risk management strategies. Institutional-grade tools like options are now widely used not just by hedge funds but also by retail traders seeking to protect capital.
While the $100,000 level captured global attention, seasoned investors understand that sustainability matters more than speed. Volatility is expected—but so is resilience.
As regulatory clarity improves and key figures like David Sacks take on influential roles, the foundation for mainstream crypto adoption strengthens. However, market participants must remain agile, using tools like hedging and technical analysis to navigate inevitable swings.
👉 Learn how to use advanced trading tools to manage crypto volatility.
Final Thoughts
Bitcoin’s brief dip of nearly 7% serves as a timely reminder that even in bull markets, price stability is never guaranteed. Yet, every correction offers both risk and opportunity—especially for those prepared with sound strategy and diversified exposure.
With growing institutional involvement, evolving regulatory landscapes, and advanced financial instruments now accessible to broader audiences, the crypto ecosystem continues its transformation from speculative frontier to established asset class.
The journey past $100,000 was symbolic—but what happens next will define the next chapter of digital finance.