Bitcoin options market less defensive ahead of Fed meeting

Bitcoin's options market has become less defensive over the past month as traders unwind downside protection ahead of the Federal Reserve meeting. The put/call ratio on open interest has dropped to approximately 0.52 from about 0.76 in late June. Calls are gaining share, indicating that traders are stepping back from hedging. Large traders have been accumulating $70,000 strike calls and bull call spreads, signaling expectations of price increases. The 25-delta skew for one-week contracts has fallen to around 4%, while three- and six-month contracts remain at 11% to 12%, suggesting traders are still paying for insurance against potential issues later this year but have largely stopped this week. Implied volatility is compressed across the curve, at 34.3% for one week compared to 40.8% for six months, indicating a calmer immediate future. The Fed's rate decision is expected Wednesday, with markets estimating a 15% chance of a July increase. This low near-term pricing leaves little cushion for surprises, potentially amplifying market moves. Bitcoin has remained near $65,000 despite recent volatility in the tech sector and bankruptcy filings from blockchain networks.

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