Bitcoin News Today: Bitcoin Volatility Rises Amid Bearish Options and Fed Uncertainty

Bitcoin surged to a record high of over $123,000 in July 2025, marking a significant milestone for the cryptocurrency market. However, this bullish momentum was followed by heightened volatility in early August, as the asset experienced a notable pullback amid shifting macroeconomic conditions and recalibrated investor sentiment [1]. Large-scale liquidations totaling $228 million were triggered on August 1, signaling a market cooldown rather than a crisis. Analysts have interpreted this as a strategic pause, with institutional support remaining robust despite increased speculative risk rotation [1].

The volatility was underscored by bearish positioning in the options market, as tracked by Derive.xyz. Bitcoin’s put open interest far exceeded call open interest by nearly five times as of August 6, with significant activity concentrated at key levels like $95,000, $80,000, and $100,000. This suggests traders are hedging against a potential drop below the $100,000 psychological level [1]. Similarly, Ethereum showed bearish tendencies, with put options exceeding calls by over 10% in the $3,200–$2,200 range, despite the asset’s price hovering around $3,624 [1].

The widening implied volatility further reflects growing market uncertainty. Bitcoin’s implied volatility was near 35%, while Ethereum’s stood at 65%, a 30-point gap compared to a 24-point gap in early June. Dr. Sean Dawson, Head of Research at Derive, noted that increased hedging activity has pushed Bitcoin’s 30-day skew to -2% from +2%, while Ethereum’s shifted from +6% to -2%. This indicates a growing bearish sentiment among traders [1].

Despite the bearish tilt, the price probability outlook remains mixed. Ethereum has a 25% chance of dropping below $3,000 by the end of August but a 30% probability of rising above $4,000, a notable increase from the previous week’s 15% [1]. For Bitcoin, there is an 18% chance of retesting the $100,000 level before the end of August. These probabilities suggest that while a near-term pullback is anticipated, a rebound remains possible, especially if macroeconomic signals shift in favor of risk-on assets.

The cautious positioning is partly influenced by the Federal Reserve’s July meeting, where for the first time in 30 years, the decision was not unanimous, with two members advocating for a rate cut. The CME FedWatch tool now shows an 85.5% probability of a September rate cut [1]. This has fueled speculation about the Fed’s next move, adding to the uncertainty driving hedging activity in the crypto markets.

From an institutional perspective, Bitwise CIO Matt Hougan sees the current volatility as a long-term buying opportunity, given the stable $3.3 trillion market cap and strong institutional demand. While short-term traders are hedging against potential declines, long-term investors remain focused on the broader trend, suggesting the pullback does not necessarily signal a reversal of Bitcoin’s long-term trajectory [1].

With the August 29 options expiry approaching, the balance between bearish hedging and potential macro-driven rallies will likely shape the near-term price action. Traders and analysts are closely monitoring key psychological levels and Fed developments, with volatility expected to remain elevated until clearer signals emerge from the central bank and global markets.

Source: [1] Options data and analysis from Derive.xyz shared with The Block [https://www.theblock.co/post/365764/derive-options-bearish-tilt-btc-eth-august-pullback?utm_source=rss&utm_medium=rss]