After options markets flashed bearish signals, bears took control of Bitcoin’s price. Digital asset exchange Deribit is sitting at the primary spot in the BTC options markets, and recently, the twenty five percent delta skew indicator hinted that sentiment among pro crypto traders was becoming more and more bearish overall.
BTC seems to have followed a descending channel since 9th November, so a “bearish” signal might be a reflection of the twenty two percent decline since reaching an ATH of 69k USD.
It is to be noted that the twenty five percent delta skew compares call and put options side-by-side. The indicator will become positive when the protective put options premium is greater than identical risk call options, thus suggesting bearish sentiment.
The opposite holds when market makers are turning more bullish, and this leads to a twenty five percent delta skew indicator to get into the negative range.
The 31st December BTC options expiry holds sixty percent of the present open interest, totaling more than thirteen Billion dollars worth of aggregate exposure. As per the data from Deribit, there is virtually no interest on put options above 60k USD.
Taking into consideration call options are one hundred and forty five percent larger than the protective puts for 31st December, one might not worry too much on how market makers are pricing these instruments. Consequently, the twenty five percent delta skew shouldn’t hold much importance right now in spite of the exchange’s bearish alert. However, nothing can be said about the next movement of the crypto market, so it’s better to be safe and do your own research.
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