BTC surged to 93,000 and then pulled back. What did the options data reveal?

Question

[Bitpush] The market has been pretty indecisive this week. There have been nonstop rumors about a rate hike from the Bank of Japan, and the Fed’s stance remains ambiguous. BTC surged to around $93,000 on Wednesday but quickly lost momentum—a classic case of trading on news.

On the technical side, things are still holding up, with the lower support levels intact. The options data is interesting: BTC implied volatility is at 48.6%, ETH is at 70%, both down from last week. But over the weekend, the 25-delta skew curve suddenly steepened—which basically means everyone started piling into downside protection. Panic is spreading.

Even more intriguing is BTC volatility risk premium. It had been negative, but this week it turned positive and is hovering around the zero line. In other words: the market feels the future is more uncertain than the present.

You can see some clues in the block trades, too. The two largest: someone spent $270,000 buying 1,200 BTC 51,225-strike puts expiring soon; another trade swept up $340,000 worth of 25,000 ETH 3,100-strike calls. One’s hedging against a crash, the other’s betting on a rebound—very much a tug-of-war.

The probability of a rate cut in December is now marked at 89.2%, but clearly the market doesn’t believe that number can save the day.

MerkleTreeHugger · Accepted Answer

Once again, it's a game of news speculation—truly something else. The technicals holding up is just on the surface; options data tells the real story. The frenzy of selling put protection shows the market lacks confidence.

BlindBoxVictim · Answer

Damn, are the whales buying up put orders again? Looks like they're about to crash the market.

LightningClicker · Answer

93000 drops again, this trick is so overused. The central banks and the Fed are working in tandem, and retail investors just have to dance along.

Looking at the options data like this, it's definitely a sign of an impending dump. Big players are spending 270,000 to buy puts—this is definitely not just for fun.

LayoffMiner · Answer

93k chickened out again, which shows that institutions are also playing a game. The sharp increase in put protection just means there's a lack of confidence... The detail of volatility turning positive is key here, so we need to be cautious going forward.