According to CoinDesk, bitcoin options pricing indicates that traders are reducing their bullish bias as the U.S. Securities and Exchange Commission's (SEC) January 10 deadline to approve spot exchange-traded funds (ETFs) approaches. Options skew tracked by Amberdata shows calls expiring in one week, one, two, and three months trading at a premium of around 2% to puts, compared to 8% in early November. This steady retreat reflects a more measured bullish sentiment towards bitcoin. Traders may be in a wait-and-watch mode ahead of the anticipated ETF decision.
Some analysts believe that the cryptocurrency, which has surged by 61% in three months due to ETF expectations, is likely to drop once the highly anticipated offerings go live. The weakening of call bias in longer-duration skews is also consistent with the out-of-consensus analysis that suggests billions of dollars in inflows into ETFs will likely occur over time rather than immediately. The one-week options at-the-money (ATM) implied volatility, which shows the market's expectations for price turbulence over the next seven days, has almost doubled to an annualized rate since December 29, surpassing longer-duration gauges. This serves as a warning for traders to stay alert leading up to and immediately after the January 10 deadline. Longer-duration implied volatility gauges have seen more minor upticks, indicating that traders expect ETF announcements to have a fleeting impact on the degree of price volatility. Furthermore, some analysts predict that ETFs will weigh on price turbulence in the long run.
