After briefly reclaiming $82,000 in early May, bitcoin failed to hold the level and plunged to $59,000 in early June. The recovery has been weak so far, with BTC now trading around $62,800.

Derivatives traders are increasingly positioning for another leg lower, with some targeting $55,000 in the coming weeks. A hawkish Federal Reserve, the seasonal slowdown that typically accompanies the summer months, and mounting concerns surrounding Strategy, the largest publicly traded holder of bitcoin, offer little reason to expect a near-term recovery.

Some traders, however, appear to be positioning for an improvement in market conditions early next year.

Strategy under pressure

Strategy's preferred stock, STRC, has recently become a source of worry in the bitcoin markets. STRC (also called “Stretch”) is issued with a $100 par value and used to raise capital for additional bitcoin purchases. The security is designed to trade near $100 while paying investors a variable dividend, but since the end of May, its price has been declining. As of June 23, STRC is traded at $87.31, i.e. with an approximately 13% discount.

This does not mean that Strategy is close to insolvency. With more than $50 billion in BTC, it is not. The issue is that its accumulation model relies on issuing securities such as STRC near par value. When STRC falls to $87, investors are signaling that they require much higher returns to fund the company.

A CryptoQuant analyst noted that Strategy’s annualized dividend obligations had nearly quadrupled to $1.2B, while its cash reserve had fallen 38% in 2026. Dividend coverage collapsed from 7+ years to just 14 months. “The company needs to stop buying Bitcoin and rebuild cash,” they said.

Strategy cash reserve and dividend coverage. Source: CryptoQuant

Charles Edwards, the CEO of Caprileo, offered an even harsher assessment, arguing that a more sustainable approach would involve reducing leverage, abandoning yield products and returning to a pure bitcoin treasury strategy. From there, Strategy could use its balance-sheet strength to acquire smaller Bitcoin treasury firms trading at steep discounts to NAV and eventually develop a bitcoin banking business centered on collateralized lending, borrowing and settlement services.

“As long as his business model requires Bitcoin “number go up” to survive and pay yield/dividends, it’s a ticking time bomb. Maybe not this cycle, but the music will stop,” Edwards posted on X.

Holding roughly 4% of bitcoin's eventual supply, Strategy has become so large within the bitcoin ecosystem that problems at the company could eventually spill over into the broader market.

Bears dominate derivatives

Options markets remain skewed toward downside protection in the short and medium term, though positioning further out the curve suggests a more constructive outlook for next year. According to Laevitas, in the past 24 hours, traders on derivatives crypto exchange Deribit accumulated short-dated put options at strike $60,000 expiring on September 26 (301 contracts). Another notable concentration of put buying was observed at the $55,000 strike across multiple expirations, totaling 177 contracts.

Put options function as insurance against price declines. They give holders the right to sell bitcoin at a predetermined price in the future, allowing them to profit if the market falls below that level. On Deribit, each contract represents one BTC.

However, while near-term positioning remains defensive, traders are also adding exposure to higher strikes further out the curve. Open interest in March 2027 $111,000 calls rose by 340 contracts, the largest increase among all instruments, indicating continued interest in long-term upside scenarios despite current market weakness.

Such scenarios likely assume that bitcoin's four-year market cycle remains intact, in which case the current bear market would be expected to bottom by the end of 2026. As Alphractal CEO Joao Wedson noted, bitcoin in 2026 is exhibiting behavioral similarities to the bear-market years of 2014, 2018 and 2022. If those historical patterns continue to play out, the market could experience further downside later this year. By the same logic, however, a recovery phase could begin in 2027, as bitcoin transitions into the next stage of its cycle.

Furthermore, Glassnode analysts note that traders on Hyperliquid continue to lean increasingly long despite bitcoin remaining well below its highs. Positioning has become progressively more bullish throughout the downtrend, highlighting persistent dip-buying behavior.

Hyperliquid BTC Long-Short Bias. Source: Glassnode

For now, however, the bears appear to control the trend, even if some investors are already looking beyond the downturn.