Bitcoin Holds Near $67K as Traders Pay Up for Crash Protection in Options Markets

In the options market, a lot of people are urgently buying insurance against Bitcoin failing. 

Tim Hakki

Fri, February 20, 2026 at 5:26 PM GMT+9 2 min read

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BTC-USD

+1.16%

BLK

+1.14%

As Bitcoin struggles to hold $67,000, options markets are flashing warning signs as traders aggressively bid up downside protection to hedge against a potential capitulation event.

By early morning, UTC, BTC had climbed 1% over 24 hours to trade near $67,000, recovering from an uneasy dip below the $66,000 handle.

The setup remains precarious. Even as price action steadies, the average U.S. ETF investor is nursing a stinging 20% paper loss, with a cost basis near $84,000. This fragility comes after a brutal 47% drawdown from the October 2025 highs.

Key Takeaways:

BTC steadies near $67K, but options skew remains bearish.

Average ETF investor sits on a 20% unrealized loss.

Private credit stress (Blue Owl) adds macro headwinds.

While recent reports indicate Abu Dhabi government funds bought $1 billion in BTC, while BlackRock doubled down on mining infrastructure, signaling continued institutional appetite, the broader retail market remains skittish. Investors are haunted by the prospect of a complete washout.

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Are We Facing Capitulation?

Jake Ostrovskis of trading firm Wintermute notes that traders are now “paying for insurance,” buying puts to cap downside risk while limiting their upside participation. This defensiveness aligns with harsh statistical realities.

The leverage washout has been severe, with Bitcoin recently hitting -2.88 standard deviations below its 200-day moving average—an anomaly unseen in a decade according to VanEck analysis.

Contagion fears are actively resurfacing. Crypto lender Blockfills froze withdrawals after a $75 million lending loss, echoing the collapses of 2022.

Simultaneously, traditional markets are flashing red: private credit giant Blue Owl fell 6% after curbing redemptions. With Fed minutes recently warning of macro headwinds, risk-off behavior is dominating the narrative.

Despite the gloom, huge divergence exists in equities. Bitcoin miners CleanSpark and MARA rallied 6%, outperforming the tech-heavy Nasdaq 100 which slid 0.6%.

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What Happens Next for BTC Price?

From a technical standpoint, Bitcoin is fiercely defending the $66,000-$68,000 zone. If this level fails, the bearish triangle pattern suggests a slide toward $60,000 or even $55k, according to CryptoQuant.

Source: TradingView

However, alternate scenarios exist. Arthur Hayes points to treasury liquidity as a potential savior for risk assets.

Furthermore, long-term confidence hasn’t evaporated; Trump insiders recently confirmed a $1 million target, suggesting whales may view this dip as a generational accumulation zone.

Story Continues  

For now, bulls will be hoping for a swift run back to $84k to give the ETF customers confidence.

Read original story Bitcoin Holds Near $67K as Traders Pay Up for Crash Protection in Options Markets by Tim Hakki at Cryptonews.com

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