The Bitcoin market experienced another eventful trading week marked by several failed breakouts from the $115,000 resistance zone despite the announcement of another interest rate cut from the US Federal Reserve (Fed). With the current price action consolidating around $110,000, data from the Bitcoin options market has provided insight into trader behavior and generalities. emotion.
Bitcoin Options Traders Bet on Stable Markets
Last Friday, prominent blockchain analytics firm Glassnode shared its weekly update on the Bitcoin options market, analyzing traders’ beliefs about future price movements. As previously mentioned, the Federal Reserve announced its second rate cut for 2025 on Wednesday. This is a popular bullish move, but hawkish sentiment that there will be fewer cuts ahead has reduced traders’ optimism, resulting in a brief rally for risky assets such as Bitcoin.
Amid these developments, the BTC Implied Volatility Index, which measures how much volatility traders expect in the future, is moving lower. This data suggests that traders are calmly pricing BTC despite the current macro noise, not expecting major price movements. Meanwhile, the 1M volatility risk premium also turned negative as realized volatility moved faster than implied volatility. Glassnode expects these developments to be mean-reverting. That is, short-term volatility is overvalued and traders are likely to sell, supporting the explanation for the expected calm market.
Moreover, Put/Call volume shows another side to this story, with a stark retest to October’s lows. Traders in particular were initially bullish on the good news, but soon shifted their sentiment to align with the general market. However, while the currency is dominant, Glassnode notes neutral directional confidence, i.e. equal buying and selling pressure, underpinning the market’s lack of confidence in an immediate bullish or bearish move.
Little hope for prices to rise?
The 25-Delta Skew chart provided another illustration of the growing caution. Specifically, this indicator measures the implied volatility between calls and puts. A neutral 25 delta skew means that puts and calls are priced the same, meaning traders perceive balanced risk. After briefly staying in this neutral zone, the indicator is now rising again, indicating that traders are appreciating the value of put options and are actively hedging against a downward price move.
Therefore, although major price movements are not expected in the near term, Bitcoin options traders appear to be very wary of a price decline. At the time of reporting, the value of Bitcoin was $109,304, reflecting a slight 1.94% increase the previous day. Meanwhile, daily trading volume decreased by 11.62%, reaching $65.18 billion.
Featured image from iStock, chart from Tradingview
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