Bitcoin Options Hedges Unwound as Bullish Positioning Heats Up
Alina Collins
Bitcoin's options put/call ratio dropped from 0.76 to 0.52 in one month as traders pulled downside protection ahead of the Fed decision — a bet that near-term risk is limited, but one that leaves the market exposed to amplified swings if a surprise lands.
How much hedging has been pulled?
Glassnode data shows the options open-interest put/call ratio — a measure of bearish contracts relative to bullish ones — fell from roughly 0.76 in late June to about 0.52.
This means → for every 100 call contracts, put contracts shrank from 76 to 52 — defensive positioning contracted by nearly a third in one month.
Large traders have concentrated buying in $70,000-strike calls and bull-spread structures, signaling expectations for spot upside.
What is the volatility curve saying?
One-week implied volatility — the market's expectation for price swings over the next seven days — compressed to 34.3%, while six-month IV sits at 40.8%: flat near-term, steep further out.
The 25-delta skew, which measures the premium for downside protection versus equivalent upside exposure, dropped to roughly 4% at the one-week tenor but holds at 11%–12% for three-to-six months.
In plain terms = traders are still paying insurance for tail risks later this year, but have largely stopped buying protection for this week.
Why is this unusual ahead of a Fed decision?
Typically, near-term IV rises into a major policy meeting as uncertainty premiums build. The current compression runs in the opposite direction.
This reflects the market's baseline assumption that the probability of a rate hike at this meeting is only about 15% — traders see limited near-term risk.
Bitcoin spot held near $65,000 over the past week, staying relatively stable through a $797 billion single-day wipeout in US mega-cap tech, bankruptcy filings by Movement Labs and Storj, and the announced shutdowns of BitMEX and BitMart.
What risk does thin positioning create?
The hedge unwind is itself a double-edged sword: light positioning cuts costs in calm markets but removes the cushion when surprises hit.
This means → if the Fed statement or economic projections deliver something unexpected, the market structure is more likely to amplify price swings than absorb them.
Put simply = the insurance policies have been cancelled — if anything goes wrong, the ride in both directions could be rougher than usual.
Content is for reference only, not financial advice.