Bitcoin’s longer-term puts, or bearish bets, are drawing stronger demand than calls for the first time this year, a sign the recent sell-off has taken a toll on market confidence.

According to data provider Skew, the six-month put-call skew, which measures the relative expensiveness of puts and calls, crossed above zero on May 17, indicating a bias for puts.

The metric has remained positive ever since, and was hovering at 4% at press time. That’s the longest stretch above zero in at least a year.

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“Longer-term bitcoin options [skew] are seeing sustained prints above zero for the first time this year, indicating demand for puts,” Federick Collins, a seasoned options trader and researcher at Glassnode, tweeted Monday. “Before this, bitcoin was the only major asset besides gold and Japanese yen to consistently trade with a more expensive upside.”

A call option gives the purchaser the right, but not the obligation, to buy the underlying asset at a predetermined price on or before a specific date. A put buyer gets the right to sell.

While bitcoin saw several price pullbacks in the 10 months to April 2021, the six-month put-call skew remained entrenched in negative territory in a sign that market participants were confident the declines would be short-lived and lead to more substantial rallies. They were right and the cryptocurrency rose to record highs after every pullback.

This time, however, investors appear worried about an extended sell-off and see low probability of a V-shaped recovery, as evidenced by the persistent positive six-month put-call skew.

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Bitcoin tanked from $58,000 to nearly $30,000 in the eight days to May 19 on concerns regarding the negative environmental impact of bitcoin mining and China’s regulatory crackdown.

Since then, the cryptocurrency has charted a narrowing price range between $30,000 and $40,000. Some technical analysts foresee a short-term price bounce. That’s not reflected in the options market. The one-week, one-month and three-month put-call skews are signaling a put bias with positive prints.

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Market participants could be buying puts against a long position in the spot or futures market, or taking a plain long put position to profit from a potential downside move.

Also read: Bitcoin Eyes Second-Biggest Monthly Drop on Record

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