Bitcoin Options Market Shows Waning Long-Term Bullish Sentiment

According to CoinDesk, the long-term sentiment of BTC options traders is waning. Data from Amber Data shows that the 180-day BTC call-put skew has dropped to zero, indicating a shift in market psychology from bullish to neutral over the long term. Griffin Ardon, head of options trading and research at Blobfin, comments that this is a concerning signal, as options traders appear to believe that Bitcoin may struggle to sustain a long-term uptrend. He notes that a similar situation occurred during the early bearish phase of 2022, around January and February. The decline in bullish sentiment reflected in the options market suggests that traders are becoming more cautious about Bitcoin's long-term prospects. The rise of covered call strategies, where investors buy the underlying asset and simultaneously sell call options to generate income, may have contributed to this reduced bullish outlook. This strategy can limit upside potential, thus impacting overall market optimism. Overall, this shift signals a more cautious posture among sophisticated traders and could precede a period of consolidation or downward price adjustment if the trend continues. Investors should stay attentive to these sentiment indicators as they might foreshadow upcoming market movements or reversals. Given this analysis, my recommendation is to approach Bitcoin with increased caution. It may be prudent to tighten stop-losses or reduce exposure until clearer bullish signals emerge. Monitoring the options market for further signs of sentiment shifts will be key for making informed trading decisions in the near future.