Bitcoin remains under pressure, struggling to break past the $70,000 mark. While market panic has subsided, traders are maintaining a defensive stance, reflecting the cryptocurrency's fragile market condition.
Data from the Bitcoin options market indicates a significant drop in implied volatility, with At-the-money IV falling to approximately 48%. This suggests traders are no longer anticipating an immediate price crash. Aggregate implied volatility expectations, measured by DVOL, have also eased, signaling a reduction in extreme hedging demand.
Despite this cooling, traders are not abandoning downside protection. The Put skew, a measure of demand for protection against price drops, remains elevated. One-week 25-delta skew has rebounded, indicating continued demand for insurance against losses.
Taker flow data further supports this cautious outlook, with puts dominating recent options activity. This suggests market participants are not convinced the current correction is over.
Dealers are positioned short gamma across a wide price range, a structure that could amplify selling pressure if Bitcoin's losses extend. Conversely, significant gamma concentration around $75,000 suggests some positioning for a potential rebound.
At present, Bitcoin trades around $67,628.