Bitcoin Options Skewness Shifts Positive Amid Market Pullback Fears

Bitcoin (BTC) has been experiencing a period of range-bound consolidation, trading sideways after reaching an all-time high of over $110,000 last week. This sideways movement is indicative of a waning upward momentum, accompanied by signs of diminishing bullish sentiment among market participants, particularly in relation to the physically-backed Bitcoin ETF (IBIT) and its associated options.

Analyst Omkar Godbole highlighted that the market's sentiment shift is evident in the skewness of one-year put-call options. This indicator measures the volatility risk pricing of put options, which are used for downside protection, relative to call options, which represent bullish bets. A negative value of this indicator typically suggests a bullish market, while a positive value indicates concerns about downside risk.

The one-year option skewness of IBIT has rebounded from a four-month low of -3.8 two weeks ago to near zero. This shift suggests that IBIT option traders are no longer actively betting on further upside, potentially expecting a market pullback. Similar sentiments are observed in the options market on the Deribit platform, where short-term call option skewness is diminishing. This means that the prices of call and put options expiring in the next two weeks are converging, indicating a more balanced market outlook.