Analysis: Bitcoin Options Traders Pile on Bearish Bets as Volatility Heats Up

IconCryptoNewsTerminal Staff08 Jul, 2024

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Analysis: Bitcoin Options Traders Pile on Bearish Bets as Volatility Heats Up

Bitcoin options traders are piling on bearish bets, emboldened by a surge in short-term implied volatility (IV), The Block reported, citing multiple analysts. According to Deribit data, the put/call ratio for BTC options expiring in the next 12 days has climbed above 1, signaling a bearish bias with a higher volume of put options trading. In a recent note, European crypto asset manager ETC Group said, "the recent increase in open interest for BTC options has been skewed towards downside or neutral bets. Moreover, the current implied volatility for short-term options is significantly higher than that for longer-term options, suggesting that the options market is pricing in an excessive amount of downside risk." These developments indicate that options traders are increasingly betting on Bitcoin price declines in the near term, potentially due to concerns over regulatory uncertainty and macroeconomic headwinds. The elevated implied volatility also highlights the heightened level of uncertainty in the market, as traders are willing to pay a premium for downside protection.

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