Bitcoin’s options market has become noticeably less cautious over the past month, with traders scaling back the downside protection they built up in June as the Federal Reserve’s policy meeting approaches.
The put/call ratio based on open interest, which compares bearish put options that gain value during price declines with bullish call options that benefit from price increases, has fallen to about 0.52 from roughly 0.76 in late June, according to Glassnode data.
The shift indicates that call options now represent a larger share of market positioning, reflecting traders’ decision to reduce hedges rather than add more protection. Recent activity among larger traders has included buying $70,000 strike calls and bullish call spreads, pointing to expectations of further upside in bitcoin’s spot price.
Bitcoin options markets are currently pricing a more stable outlook for the immediate future compared with the broader six-month horizon. Traders appear less concerned about short-term volatility despite the upcoming Federal Reserve meeting.
The 25-delta skew, which measures the additional premium paid for downside protection versus comparable upside exposure, has dropped to around 4% for one-week options. By comparison, three-month and six-month contracts continue to show skews between 11% and 12%.
The difference suggests investors are still maintaining longer-term protection against potential market risks but have largely reduced their demand for short-term hedges.
Implied volatility, which reflects expectations for future bitcoin price movements, has declined across the options curve, with one-week volatility at 34.3% compared with 40.8% for six-month contracts.
The upward-sloping volatility structure suggests traders expect the near-term market environment to remain calmer than the months ahead. This is an unusual setup given that a major macroeconomic event, the Federal Reserve decision, is scheduled for the week.
The Fed’s interest-rate announcement is due Wednesday, with markets currently pricing only about a 15% chance of a July rate increase. Based on current expectations, the muted short-term options pricing appears reasonable.
However, reduced hedging also means the market has less protection if the Fed’s statement or economic forecasts surprise investors. Thin positioning can often increase volatility, causing sharper moves when unexpected developments occur.
Bitcoin traded around $65,000 for much of the past week, remaining relatively stable even after Thursday’s market sell-off erased $797 billion from leading U.S. technology stocks. The crypto market also absorbed several negative events during the period, including bankruptcy protection filings from blockchain projects Movement Labs and Storj, as well as wind-down announcements from crypto exchanges BitMEX and BitMart.
