Bitcoin’s options market has shifted toward a more optimistic stance over the past month, with traders reducing the downside hedges they accumulated in June ahead of the Federal Reserve’s upcoming meeting.
The put/call ratio based on open interest, which compares the amount of capital held in put options designed to benefit from falling prices against call options that gain from upward moves, has declined to around 0.52 from approximately 0.76 in late June, according to Glassnode.
The falling ratio suggests call options are becoming more dominant, indicating that traders are easing their defensive positioning rather than increasing protection against declines. Recent activity from large market participants shows increased demand for $70,000 strike calls and bullish call spreads, reflecting expectations for further bitcoin gains.
The options market is currently pricing a relatively calm near-term outlook, with traders expecting less volatility over the coming week than over the next several months.
The 25-delta skew, which measures the premium investors pay for downside protection compared with equivalent upside exposure, has dropped to roughly 4% for one-week options. Meanwhile, three-month and six-month options continue to show higher skews of around 11% to 12%.
This difference suggests traders still see potential risks over the longer term but have largely reduced their need for immediate downside insurance.
Implied volatility, which represents the market’s expectations for future price swings, remains compressed across different timeframes. One-week bitcoin options show implied volatility of about 34.3%, compared with 40.8% for six-month contracts.
The rising volatility curve indicates that traders expect short-term conditions to remain relatively stable compared with the months ahead. Such a structure is uncommon before a major scheduled macro event like the Federal Reserve’s policy decision.
The Fed is set to announce its interest-rate decision on Wednesday, with markets currently pricing in only about a 15% chance of a rate increase in July. Given that expectation, the low level of short-term options pricing appears justified.
However, reduced hedging leaves the market more exposed if the Fed’s policy statement or economic projections surprise investors. When traders are positioned lightly, unexpected developments can trigger larger price movements instead of being absorbed gradually.
Bitcoin remained near the $65,000 mark throughout most of the previous week, showing resilience despite Thursday’s equity market sell-off that wiped out $797 billion from major U.S. technology stocks. The crypto sector also faced several setbacks during the period, including bankruptcy protection filings from Movement Labs and Storj, along with shutdown plans announced by crypto exchanges BitMEX and BitMart.
