Deribit

Bitcoin BTC$115,802.96 traders continue to eye downside volatility, hedging their bullish exposure despite recent positive signals, such as the Federal Reserve’s rate cut, crypto derivatives exchange Deribit’s CEO Luuk Strijers told CoinDesk.

Earlier this week, the U.S. Fed cut interest rates by 25 basis points and signaled an additional 50 basis points of easing expected by year-end. The Securities and Exchange Commission (SEC) unveiled a new generic listing standard for crypto ETFs, which is set to accelerate the approval process.

Meanwhile, Deribit’s DVOL index, which measures the 30-day implied volatility, remains subdued at around 24%, the lowest in two years.

Historically, bullish sentiment is strong in such situations, causing call options – bets on price increases in BTC – to become more expensive than put options, which provide insurance against price declines. However, on Deribit, put options continue to trade at a premium across all time frames.

“Skew across all time frames remains flat to negative,” Strijers explained. “We continue to see demand for puts to hedge downside exposure, while call overwriting flows are pressuring the topside.” Deribit is the world’s largest crypto options exchange, accounting for over 80% of the global activity.

Options skew measures the implied volatility difference between call and put options for a given expiration. A negative skew indicates bearish sentiment, with investors expecting a price drop; a positive skew reflects bullish expectations.

BTC options skew is negative across all time frames. (Amberdata/Deribit)

Currently, the seven, 30, 60, and 90 day skews are slightly negative, with the 180 day skew neutral, according to data source Amberdata.

This indicates persistent concerns about a possible BTC correction.

Investors buying puts may be concerned that the Fed’s easing was already factored into the market ahead of the decision and that a deteriorating economic outlook could reduce demand for riskier assets, such as bitcoin.

“After the Fed’s decision, some of the earlier optimism has faded. The market now seems to be waiting for the next catalyst — whether macro or crypto-specific — to break the stalemate and push option positioning out of its current balance between caution and optimism,” Strijers said.

Sidrah Fariq, global head of retail sales and business development at Deribit, said the persistent put bias represents market maturity.

“In some sense, BTC options are behaving more like S&P index options – a sign of maturity, but also of market caution,” Fariq said.

Additionally, traders writing covered calls – selling call options against their spot holdings to collect premium – which may be contributing to the put bias, particularly in longer-dated options. This strategy generates additional income but can cap upside potential.

Covered call has emerged as a popular strategy among BTC, ETH and XRP traders in recent years.

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