Bitcoin's negative options skew signals traders remain wary even as the Fed loosens policy

After the Federal Reserve implemented a 25 basis point interest rate cut, Bitcoin traders have ramped up their acquisition of downside protection, demonstrating ongoing caution even as overall market sentiment improves. Deribit—the top global platform for crypto options—has observed a negative skew in options across all durations, signaling a heightened preference for puts to guard against price drops. This trend is at odds with the usual upbeat outlook that follows rate cuts, where calls normally outnumber puts due to expectations of rising prices. The 30-day implied volatility for

(BTC) remains at a muted 24%, marking its lowest point in two years and highlighting a wary market mood.

Despite the Fed’s looser monetary stance and the SEC’s introduction of a new crypto ETF listing rule, traders remain cautious. Deribit CEO Luuk Strijers remarked that the market is “awaiting a new catalyst” to resolve the standoff between caution and optimism. The prevailing bearish skew reflects traders’ efforts to hedge in case the Fed’s policy change is already reflected in prices, or if a worsening macroeconomic backdrop reduces appetite for risky assets such as Bitcoin. This outlook is underscored by the continued premium on puts, with slight negative skews for the seven, 30, 60, and 90-day periods, and a neutral stance for the 180-day, according to Amberdata.

This tension is also visible in Bitcoin’s price movements. Although

climbed more than 4% to $116,977 in the week leading up to the Fed’s September 17 announcement, ether (ETH) advanced almost 8% to $4,650, pointing to stronger risk-taking. Nevertheless, the market’s response to the Fed’s rate change hinges on its scale. Amberdata’s Greg Magadini suggests that an unexpected 50 basis point cut—though unlikely—could prompt a “+gamma BUY signal” for BTC and other coins. Conversely, if the Fed delivers the anticipated 25 basis point cut, Bitcoin may see a slow upward move, and ETH may require more time to revisit previous highs.

Data from Deribit reveal a more sophisticated options market, with strategies like selling covered calls—writing call options against spot positions to earn premiums—growing in popularity. Although this strategy limits potential gains, it has contributed to the persistent put preference for longer-dated options. Sirah Farik, Deribit’s global retail sales head, compared BTC option activity to that of S&P index options, indicating a trend toward more institutional-style risk management. The put-to-call premium ratio at Deribit is currently 71%, suggesting some level of caution but falling short of panic, as panic levels are generally above 180%.

Wider economic factors add further uncertainty. While the Fed’s looser policy is likely to weaken the U.S. dollar and support risk assets, concerns over AI-related trade disputes—such as China imposing limits on advanced chip imports—have curbed short-term confidence. Bitcoin’s inability to hold above $117,000 and the conflicting signals from derivatives markets point to a preference for risk control over aggressive buying. This cautious behavior is also reflected in $292 million in net inflows into Bitcoin spot ETFs, which have buoyed bullish hopes despite the negative options backdrop.

As investors look to the Fed’s next decision, the market remains finely balanced between caution and optimism. Traders continue to protect themselves from possible pullbacks while keeping exposure to gains that could arise from looser monetary policy. How the Fed moves forward is likely to shape whether Bitcoin breaks out of its current range or experiences renewed volatility.