Bitcoin’s options market data shows investors are beginning to position for a temporary retreat from the cryptocurrency’s steep bull run.
The one-month implied volatility, which is influenced by the demand for call and put options, jumped from roughly 55% to a four-month high of 70.5% in the past two days, suggesting increased expectations for price turbulence over the next four weeks.
The one-month gauge is currently seen at 65%. Implied volatility metrics for longer durations have also recovered from recent lows.
Alongside that, the negative spread between the cost of puts (bearish bets) and calls (bullish bets) has eased, as evidenced by the recovery in the one-, three- and six-month put-call skews. Notably, the one-month gauge bounced from -27% to -14%, according to data source Skew.
These numbers indicate increased demand for put options – a sign of investors hedging against a potential price pullback. While call buying can and does cause a rise in implied volatility…
