Demand for short-term downside protection in Bitcoin options weakened, while pricing continued to indicate that investors remain cautious at longer maturities.
According to Deribit data cited by CoinDesk, Bitcoin’s one-week put-call skew fell to below 1% from around 10% about a week ago. The indicator, which tracks the relative pricing of put and call options, signals that the additional premium paid for short-term downside protection has declined significantly.
Short-Term Relief, Long-Term Caution
A put is an option that gives an investor the right to sell at a set strike price and can be used to hedge against a decline. A call gives the right to buy at a set price.
Although the pricing gap between the two sides narrowed at the one-week maturity, a clear bias in favor of put options persists in one-, three-, and six-month options. So the reduced need for protection in the near term does not yet appear to have been matched to the same extent at longer maturities.
The 10% and 1% figures here indicate the trend in options pricing, not the share of investors expecting a decline.
Why Did the $65,000 Contract Stand Out?
In the latest 24-hour data cited in the report, Deribit’s most-traded Bitcoin contract was a put option expiring on October 30 with a $65,000 strike price. On the Ethereum side, a call option expiring on October 29 with a $3,400 strike price ranked first.
These are the contracts’ strike prices, not definite price targets for the market. Trading volume alone also does not show which direction or strategy the contracts are being used for. For that reason, a decline in near-term Bitcoin hedging premiums is not necessarily inconsistent with heavy trading in a particular put contract.
The main divergence is across maturities: caution against a decline has eased in short-term pricing, while demand for protection over the coming months persists.
Not investment advice.