The positioning of bitcoin options is in line with previous halvings, with the market skewing bullish and pricing calls at higher levels versus puts for the end-of-June 2024 expiry, an analyst said.
A put-call options ratio below one indicates that the call volume exceeds the put volume, signifying bullish sentiment in the market. The bitcoin put-call skew is negative as of May and beyond, which means calls are relatively more expensive — indicating bullish sentiment.
“The put skew is still negative over the longer run, so the market is still pricing calls at higher levels vs. puts as of June 2024,” Deribit CEO Luuk Strijers told The Block.
The positive impact of Bitcoin’s halving will take time
Strijers added that although the bitcoin price has fallen in recent days, the composition of bitcoin options is still “in line with previous halvings” and that positive price impact will take time to materialize.
The Deribit CEO doubled down on his affirmation that “the market has not turned bearish.” He pointed to bitcoin’s sensitivity to the macroeconomic environment, which could create short-term downside pressure.
“A high-risk asset like bitcoin is heavily correlated with macro events and unrest which will dominate shorter-term halving scarcity effects,” he added.
Concentrated selling of May-expiry calls
According to QCP Capital analysts, there has been a concentrated selling of bitcoin calls at a strike price of $80,000 for May’s end-of-month expiry.
However, Strijers sees this as a result of a recent reduction in the basis yield, coming down from almost 20% annualized to 10%, which could have impacted derivatives traders holding high strike price calls. “In the absence of those higher yields, some investors might have started looking at selling out of the money calls as alternative premium income, and that activity has pushed implied volatility levels down,” Strijers added.
He conceded that the current bitcoin trading range has reduced some of the earlier upside excitement in the derivatives market. However, he added that the basis yield is still positive and “higher than we have seen for quite some time.”
Earlier bullish sentiment is beginning to wane
According to Bifinex analysts, the shift towards selling these high strike price calls indicates that earlier bullish sentiment may be waning.
“This transition could be a response to several market factors, including U.S. stock markets where multiple large-cap equities have had significant intra-day declines, such as Meta or Tesla, in the current earnings season,” Bitfinex analysts told The Block.
The analysts observe a reassessment in the options market “that could also show participants revising their expectations and taking profits or cutting losses ahead of the summer.”
Bitcoin options implied volatility declining
This Friday will see the expiry of $6.2 billion out of $19.2 billion bitcoin options in current open interest.
Bitcoin 
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implied volatility is trading at 58. “This is the lowest it has been in 2 months; however, most of the past year, implied vol was lower vs. what we see today,” Strijers said.
The largest digital asset by market cap is holding precariously above the $64,000 mark, increasing by 1.4% in the past 24 hours, and was trading at $64,441 at 6:24 a.m. ET, according to The Block’s Price Page.
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