The chart data released by Matrixport today shows that the Bitcoin market presents a unique trading tendency. The option skewness of Bitcoin (that is, the difference in implied volatility between put and call options) has dropped to nearly -10%. This data indicates that the implied volatility of call options is 10% higher than that of put options, directly reflecting that current traders are more keen on chasing the upward potential of the market rather than hedging against downward risks.
The option skewness has declined and the market sentiment is extremely optimistic
Option skewness, as an important indicator for measuring market sentiment, has seen the Bitcoin option skewness drop to nearly -10% this time, which holds significant market signal value. Under normal circumstances, the implied volatility of call options is higher than that of put options, indicating that investors have a higher expectation of a future increase in the price of Bitcoin and are willing to pay a higher option premium to obtain potential gains from the increase. Behind this phenomenon lies the pervasive optimism in the market. From the perspective of market performance, the recent steady rise in Bitcoin’s price has attracted a large number of investors to enter the market. They expect to ride on the “tailwind” of the price increase to obtain substantial returns, which has led to a sharp increase in the demand for call options and driven its implied volatility to continuously rise.
Extreme emotion warning. It is recommended to control risk exposure
Based on Matrixport’s past experience, when the option skewness reaches a similar level, it often indicates that the market sentiment is already in an extremely optimistic state. And this extreme sentiment is usually a reverse signal, indicating that the short-term market situation may face stagnation or correction. Although Matrixport has maintained a bullish stance since mid-April, in the current context where market sentiment is generally bullish, it also reminds investors to remain rational and vigilant. The core of trading lies in balancing risk and return. This might be an appropriate time to gradually control the risk exposure. Investors should not be carried away by the optimistic market sentiment and blindly chase the rising trend. On the contrary, maintaining patience and waiting for a more attractive entry point is a more stable investment strategy.
In the context of intensified market volatility, reasonably controlling positions and diversifying investments can help reduce potential risks and prevent significant losses due to market corrections. Subsequently, all market participants will also continue to pay close attention to the changes in the skewness of Bitcoin options, which will serve as an important reference for judging market trends and adjusting investment strategies.
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