• Traders are eyeing the possibility of another big sell-off in bitcoin.
• Bitcoin options show traders positioning for a potential decline to $70,000.
• The cryptocurrency tipped into a bear market this week, down more than 20% from its January peak.

Crypto traders are eyeing the possibility that bitcoin's sell-off worsens after the token entered a technical bear market this week.

Bitcoin options show open interest for put options with a strike price of $70,000 rose to the second-highest level among all contracts set to expire this Friday, according to Deribit data cited by Bloomberg.

If bitcoin were to fall to that level, it would mark another 18% drop from current levels and 35% from its all-time-high above $109,000 in January.

"Bitcoin has confirmed a short-term breakdown within the context of its long-term uptrend," Katie Stockton, a top analyst and the founder of Fairlead Strategists, told Business Insider in a statement. "We would not rule out a test of secondary support near $73.8K (former resistance from 2024) before the corrective phase fully matures."

George Pavel, the general manager of the trading platform NAGA, also believes it's possible for bitcoin to drop as low as $70,000, given that the coin recently breached the key $90,000 resistance level.

"If key support levels such as the USD 82,000 doesn't hold, Bitcoin could depreciate further," he told Business Insider in an email.

Bitcoin slipped into bear market territory this week, with the crypto now down around 21% from its record-high of $109,350 in January.

The coin traded around $85,821 Thursday morning.

Meanwhile, the total market cap of bitcoin slumped to $1.7 trillion, while the trading volume over the last 24 hours spiked 27%, according to data from CoinMarketCap.

The sell-off appeared to be triggered by a broader risk-off move in markets, in addition to other factors that have damaged crypto investors' confidence.

Spot bitcoin ETFs saw more than $1.1 billion in outflows on Tuesday, according to data from Farside, affecting bitcoin's price.

Cryptocurrencies also saw heightened volatility and weaker sentiment after hackers stole $1.5 billion from the crypto exchange ByBit last week. Analysts say it could be one of the largest crypto hacks ever.

Pavel also thinks macroeconomic uncertainty and the Trump administration's slow progress in implementing pro-crypto policies could be adding to the selling pressure.

"That said, unless there is a significant shift in market dynamics or a catalyst that restores investor confidence, the rout could extend for some time," he said.