Options Traders Shift Neutral Amid Mounting Economic Pressures
Bitcoin’s once-strong long-term bullish outlook is beginning to weaken, as options market indicators reveal a significant shift in sentiment. As economic concerns grow, the market is signaling caution about BTC’s trajectory in the months ahead.
The 180-day skew, a key metric measuring the difference between the implied volatility of out-of-the-money calls and puts on Deribit, has fallen to zero — a neutral level. This suggests that options traders no longer see a clear upside bias, indicating waning confidence in sustained price appreciation.
“Bitcoin’s bullish sentiment for far-month options has vanished,” said Griffin Ardern, head of options trading at BloFin. “It’s now firmly neutral.”
Deja Vu: Similar Patterns Preceded Previous Bear Market
This kind of sentiment reset last occurred in early 2022, just before Bitcoin entered a prolonged bear market. Traders are increasingly cautious about BTC’s ability to break to new highs, especially with volatility returning and the macroeconomic landscape deteriorating.
Ardern warns that the options market now views a long-term uptrend as unlikely, and the probability of BTC reaching new highs in the near term is diminishing.
Inflation and Tariffs Cloud the Macro Outlook
The neutral sentiment shift coincides with rising inflation risks and disappointing U.S. labor market data. The Federal Reserve’s preferred inflation metric, core PCE, showed an uptick in June. Meanwhile, nonfarm payrolls came in below expectations, raising fresh doubts about the health of the economy.
“Inflationary supply chain impulses are already showing up in economic data,” Ardern noted.
With new tariffs and supply bottlenecks fueling inflation concerns, analysts fear the Fed’s ability to implement rate cuts will be constrained. This in turn weighs on risk assets, including Bitcoin.
Covered Calls Could Be Distorting the Skew
Some of the 180-day skew neutralization may stem from the rise of structured products — particularly covered call strategies. These involve selling high-strike call options to generate additional yield on spot holdings, a trend that can artificially lower call option implied volatility, contributing to the skew’s flattening.
Short-Term Downside Protection in Demand
BTC fell over 4% last week, briefly testing the key support zone near $11,965. The price action triggered a drop in short-term option skews, with traders increasingly buying puts to hedge against further downside.
With sentiment cooling and macroeconomic risks rising, Bitcoin’s path to new highs is facing its toughest test yet in 2025.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.