Bitcoin Options Traders Trim Hedges Ahead of Fed Decision

The put/call ratio is slipping, and large traders are moving back into $70,000 calls. Markets are expecting a quieter Fed week, but they remain sensitive to any surprise in the statement.

Key Takeaways

• Bitcoin options traders are scaling back downside protection as the Federal Reserve heads into another rate decision.
• The put/call ratio has fallen to about 0.52, while large traders have added $70,000 calls and bull call spreads.
• The market is bracing for a quieter week, with Bitcoin trading around $65,000 and short-term volatility and downside skew easing.

Bitcoin options traders are pulling back on downside protection as the Federal Reserve prepares for another rate decision. In other words, the market is pricing in a calmer week than it was at the end of June, with attention shifting away from hedges and toward possible upside.

Less Defensive Positioning

Glassnode data shows the put/call ratio on open interest has dropped to about 0.52, down from roughly 0.76 at the end of June. That means there are now fewer puts relative to calls, which points to traders placing less weight on protection against a downside move.

That change is also showing up in actual trading flows. Large players have recently added $70,000 (€61,500) strike calls and bull call spreads, a sign they are positioning for more upside in spot. On Deribit, open interest is also clustered around the $70,000 (€61,500) and $72,000 (€63,300) strikes, where calls are clearly outnumbering puts.

A Quiet Week in Price Action

The 25-delta skew, which tracks how much traders are willing to pay for downside protection, has eased to about 4% in the one-week expiry. For three- and six-month contracts, it is still sitting at 11% to 12%. That suggests the market is still buying insurance for later this year, just not as aggressively for the next few days.

Implied volatility has cooled as well. It is at 34.3% for one week compared with 40.8% for six months, which lines up with a market that sees the near term as relatively calm. Across the broader market, that softer tone is also reflected in a drop in volatility expectations from 48% to 40%.

Why This Matters

For European crypto watchers, this matters because Bitcoin often reacts quickly to macro news in the US, especially when the options market is already lightly positioned. That kind of setup can make the market more vulnerable to a surprise in the statement or the Fed’s economic projections. Historically, FOMC decisions are also often followed by a sell the news reaction, although that does not automatically say anything about this specific meeting.

Bitcoin traded around $65,000 (€57,100) over the past week, including during Thursday’s broad sell-off and despite turbulence elsewhere in crypto. That makes the options market a useful read on how much movement traders are still expecting heading into Wednesday.

The market is also keeping an eye on broader rate expectations. In a separate piece about the Fed decision and rate expectations, we explain why a surprise from the central bank can quickly spill over into the Bitcoin price.