Recent data from Deribit and Amberdata indicate that bitcoin’s 180-day implied volatility skew has retreated to zero, marking a neutral stance among far-dated options. The skew measures the pricing differential between out-of-the-money call and put options; a positive reading reflects bullish bias, while a negative reading implies bearish sentiment. The reset to neutral suggests diminished long-term conviction in sustained upside.
Economic indicators have contributed to the shift. Consumer price inflation accelerated in June, and nonfarm payrolls fell short of consensus forecasts, reigniting concerns about persistent inflation. Elevated inflation may constrain Federal Reserve rate cut prospects, raising uncertainty for risk assets, including cryptocurrencies.
Bloomberg-sourced commentary from JPMorgan analysts warned that U.S. tariffs could further fuel inflation pressures in the second half of 2025, complicating the central bank’s policy outlook. That backdrop, combined with supply chain disruptions, has undermined premium levels on far-dated call options, eroding the skew advantage typically exploited by long-term bulls.
Griffin Ardern, head of options trading at BloFin, observed parallels to early 2022, when a similar neutral skew presaged a prolonged price consolidation. Ardern noted that waning buy-the-dip sentiment among options traders has limited demand for upside protection, while put activity has risen as participants seek insurance against deeper pullbacks.
Structured product flows have also influenced skew dynamics. Covered call strategies on bitcoin spot holdings have sold call options at higher strikes to generate yield, exerting downward pressure on call implied volatility. That trend, combined with muted put skew, has produced a flatter volatility surface across expiries.
Bitcoin price reacted with a 4% decline last week, briefly testing support near $110,500. Short-term skews turned modestly negative, reflecting outsized demand for puts among risk-averse traders. Technical analysts have since cited support at the $112,000 level and resistance near $118,000, defining a narrow trading range for the coming week.
Market participants will monitor July’s CPI and PPI readings alongside ISM services PMI for further directional clarity. Should economic data surprise to the downside, a revival of implied volatility and skew may restore long-term bullish conviction. Until then, a neutral options bias may persist, underscoring a cautious outlook despite bitcoin’s broader uptrend this year.
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