Bitcoin Options Skew Turns Bearish as Traders Avoid Upside Protection

Bitcoin’s options skew has turned bearish, raising eyebrows among traders and analysts. According to a recent tweet from @glassnode, the current market sentiment reflects a notable shift, as traders seem reluctant to pay for upside protection. This change could have implications for future price movements and market dynamics, particularly as the broader crypto landscape remains mixed. You can read more about it here.

What Went Down

The current state of Bitcoin’s options market reveals a bearish skew, primarily because traders are not aggressively seeking protection against price drops. This was highlighted in a recent analysis, which noted that while downside implied volatility is relatively inexpensive, the upside implied volatility has reached an all-time low of 23%. This suggests that traders are less confident in Bitcoin’s potential for upward movement, opting instead to focus on downside risks. The broader crypto market is currently showing mixed signals, which may contribute to this cautious sentiment among traders.

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