Bitcoin traders are paying less than ever to bet on a price rise, even as sentiment swings sharply on relatively small moves.
Glassnode, a blockchain analytics firm, said in a Wednesday article on X that Bitcoin's upside implied volatility had fallen to about 23%, the lowest reading in the history of its metric.
- Implied volatility is derived from option prices and reflects how much future movement traders are pricing into an asset.
- Glassnode's upside measure focuses on bullish call options, which give holders the right to buy Bitcoin at a predetermined price.
But the decline doesn't appear to reflect an unusually large rush into bearish protection. Glassnode said downside implied volatility had been lower as recently as August 2023, suggesting the imbalance came mainly from fading demand for calls.
"Nobody is paying for upside, and nobody is paying much for downside," the firm wrote.
Sentiment is still moving quickly
Still, traders haven't become consistently neutral as the firm said its one-week options skew, a measure comparing demand for bearish puts and bullish calls, fell by more than eight points in a single session even though Bitcoin's spot price barely moved. A similar change two weeks earlier reversed within four days.
Chart comparing Bitcoin's downside vs upside implied volatility. Source: Glassnode
Perpetual futures funding, meanwhile, remained close to its long-term average, suggesting the rapid shifts were concentrated in options sentiment.
Past squeezes usually broke higher
Glassnode said periods when one-month realized volatility reached similarly low levels had almost always ended with an upward move.
But the firm cautioned that earlier squeezes generally formed alongside stronger demand. U.S. spot Bitcoin funds instead shed roughly 65,800 BTC in June, their largest monthly outflow on record, while corporate purchases were not large enough to offset the withdrawals.
The record-low price of bullish options therefore doesn't itself signal that Bitcoin is preparing to rally. It shows that traders are assigning little value to an upside move, which could leave them chasing the market if volatility returns while demand remains uncertain.