Short-term bullish enthusiasm is high, but the Bitcoin options market is warning of downside risks.

The Bitcoin options market has recently exhibited an interesting divergence. One-week options, driven by bullish activity, saw the put/call ratio drop from 1 to 0.4, and the skew shifted from the bearish region toward neutrality. However, this optimism has not extended to longer-term maturities. The one-month and three-month options skew remain firmly in the bearish asymmetric zone, indicating that market confidence in upside is subject to a clear “expiration.” According to Glassnode’s analysis, this divergence reflects a key issue: upward demand is genuine, but the risk is not being re-priced across all maturities.

The Truth Behind Short-Term Optimism

One-week options bullish activity

In the past week, the Bitcoin options market has shown clear bullish signals. The ratio of put to call volume in options has fallen from 1 to 0.4, indicating a significant increase in call option buying. Meanwhile, the 25D skew for one week has shifted from deep bearish territory toward neutral levels.

These data suggest that there is indeed genuine buying pressure driving bullish options trading. But the question is, how short-lived is this demand? This is not a minor detail but a key to understanding the market’s true expectations.

Long-term options still warning

When we extend the horizon, the picture changes dramatically. The one-month 25D skew has only moved from its 7% low to 4%, still within the bearish asymmetric zone. The three-month 25D skew has changed by less than 1.5%, remaining firmly in the bearish region.

What does this imply? It indicates that traders are paying a premium for downside risk further out. Even with recent bullish activity, the market remains cautious about the medium to long term.

Volatility Behavior Reveals Market Truth

Gamma sellers taking profits

Analysis shows that implied volatility of at-the-money options has been sold during Bitcoin’s upward moves, with gamma sellers (typically market makers and institutions) taking profits as prices rise. This phenomenon is critical.

What would an ideal sustainable breakout look like? When the spot price approaches key levels, skew across all maturities should remain firmly pointed higher, and volatility should be bought rather than sold. But last week’s movements did not meet these conditions.

Lack of sustainability signals

Volatility has been sold, gamma sellers are taking profits, all pointing to a conclusion: the market does not believe in the durability of the current rally. This is not typical of a breakout trend but more akin to a rebound with profit-taking.

Risk Assessment in the Market Context

Currently, Bitcoin trades around $89,185, down 0.82% in the past 24 hours and down 6.44% over the past 7 days. According to relevant information, the overall market participation is low, derivatives activity is subdued, and liquidity is insufficient. In this environment, signals from the options market are especially significant.

Large players are quietly accumulating (their holdings have increased from 3.1 million BTC to 3.3 million BTC over the past month), but retail investors are panicking. This conflicting behavior, combined with asymmetric risk signals from the options market, suggests that the market may be building a bottom, but confidence still needs to be restored.

Summary

The story of the Bitcoin options market is quite clear: short-term bullish demand is real but highly concentrated within the one-week horizon, accompanied by volatility selling and profit-taking. Longer-term options markets are still pricing in downside risks, indicating that market confidence in upside has a clear “expiration.”

This divergence itself is a risk signal. It tells us that the current rally lacks confirmation from derivatives markets, and its sustainability remains uncertain. For traders, this means exercising greater caution with short-term rebounds while remaining alert to downside risks. The wisdom of the options market lies in its data-driven narrative: optimism is time-limited.