What You Should Know:
- Bitcoin’s short-term options skew dropped significantly as traders sought downside protection amid tensions in the Middle East.
- The seven-day skew fell to its lowest since April, highlighting an increased demand for put options compared to calls.
- Bitcoin’s price declined, reaching $103,150, with oil prices rising sharply due to geopolitical events.
Bitcoin’s BTC options skew fell during early trading hours in Asia when traders sought protection against potential losses amid rising tensions in the Middle East, triggering a spike in oil prices.
The seven-day options skew, which assesses the relative cost of BTC call options compared to puts, hit a low of -3.84%, marking its lowest point since April 16, according to data from Amberdata. This spike in demand for puts, which are seen as a hedge, caused further shifts in the longer-term skews as well.
Traders often pursue put options to hedge their risks in both spot and futures markets or anticipate price drops. Bitcoin’s value settled at its 50-day simple moving average during this downturn, after previously touching the $110,000 mark earlier in the week. Holding above the $103,150 support level is crucial; a decline below it might entice more sellers, reminiscent of previous market actions.
