Bitcoin's one-month put-call skew, which measures the cost of puts, or bearish bets, relative to calls, or bullish bets, has come off sharply to 2% from 13% late last week, according to data provided by crypto derivatives analytics firm Skew. The one-week put-call skew has declined from 13% to 5%.
The narrowing of the spread between prices for puts and calls essentially means investors are no longer seeking downside hedges in anticipation of an extended price drop.
Ether's one-week and one-month skews have seen similar drawdowns to 0% and 1%, respectively.
The short-term skews have pulled back due to a flurry of call buying. On Friday, a trader bought a total of 2,000 call option contracts on bitcoin in multiple clips of 100 via over-the-counter (OTC) desk Paradigm. The buying was concentrated in July 30 expiry calls at strike prices of $33,000, $34,000 and $35,000. The trader also snapped up Aug. 6 expiry calls at strikes $34,000, $35,000, and $36,000.
A call option gives the purchaser the right but not the obligation to buy the underlying asset at a predetermined price on or before a specific date. A call buyer is implicitly bullish on the market. A put option gives the right to sell.
While short-dated bitcoin and ether put-call skews have nearly turned neutral from bearish, the longer duration skews remain entrenched in the negative territory, signaling a bullish bias.
At press time, bitcoin is changing hands near $38,500, and ether is trading near $2,300, according to CoinDesk 20 data.
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.