Bitcoin options traders have sharply scaled back downside hedging since late June, according to a ChainCatcher report. The put-to-call open interest ratio has fallen from 0.76 to about 0.52, pointing to lighter demand for bearish protection in the options market.
Short-dated contracts also show weaker demand for near-term protection than options expiring in three to six months. That setup suggests traders see this week as relatively calm, while still keeping hedges in place for potential volatility later in the year.
Implied volatility remains low across maturities, and the term structure slopes upward into the future. ChainCatcher said that if Wednesday’s Federal Reserve rate decision or forecasts come in outside investor expectations, the market may have limited cushion to absorb the surprise.
Bitcoin options traders have sharply reduced downside hedging since late June, according to ChainCatcher. The put-to-call open interest ratio has dropped from 0.76 to about 0.52.
Short-dated options show that demand for near-term protection is lower than for contracts with three- to six-month maturities. That suggests traders expect a relatively calm market this week, while still hedging against volatility later this year.
Implied volatility is low across maturities, and the term structure rises further out. If Wednesday’s Federal Reserve rate decision or forecasts land outside investor expectations, the market may have limited room to cushion the reaction.
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