Markets Bitcoin options traders are significantly reducing their hedging strategies as they approach the Federal Reserve's upcoming meeting.
The put/call ratio has declined to approximately 0.52 from 0.76 in late June, indicating a drop in the demand for short-term downside protection. The options market is currently set for a relatively calm week, coinciding with the FOMC's decision.
By Shaurya Malwa|Edited by Omkar Godbole Jul 27, 2026, 11:53 a.m. 2 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on
SummaryShow- Since late June, Bitcoin options traders have significantly cut back on downside hedging, with the put/call open-interest ratio decreasing to around 0.52 from 0.76.
- There is a noticeable decline in demand for short-term options compared to those with three- to six-month expirations, suggesting that traders anticipate a quieter week ahead while still preparing for potential volatility later this year.
- Implied volatility remains low across the board, gradually increasing into the future, which means that if the Federal Reserve's decision or projections surprise the markets, the response may be limited.
The options market for Bitcoin, which is currently priced at BTC$65,082.17, has become less defensive over the past month, as traders unwind the hedging strategies they had established in June ahead of the Federal Reserve's meeting.
According to data from Glassnode, the put/call ratio, which indicates the proportion of market positions in puts (which profit from price declines) versus calls (which profit from price increases), has fallen to approximately 0.52 from about 0.76 in late June.
There is a clear trend of traders shifting towards calls, indicating a reduction in hedging activity. Recently, large traders have been acquiring $70,000 strike calls and bull call spreads, hinting at an expectation of price increases.
Bitcoin options are pricing the upcoming week as more stable compared to the next six months. (Shaurya Malwa/CoinDesk)The 25-delta skew, which reflects the cost of downside protection relative to upside exposure, has dipped to around 4% for one-week options, while three- and six-month contracts remain higher at 11% to 12%. This suggests that while traders are still paying for protection against future risks, they have largely ceased doing so for the current week.
Implied volatility, representing the market's forecast of price movements, is currently at 34.3% for one week compared to 40.8% for six months, indicating that the market expects the near-term to be less volatile than the longer-term outlook, which contrasts with typical behavior observed before major macroeconomic events.
The Federal Reserve's rate decision is expected on Wednesday, with market expectations for a July increase sitting at around 15%. This low near-term pricing is justifiable under the baseline scenario, yet it also means there is little room for error if the announcements or projections take the market by surprise, potentially amplifying market movements instead of mitigating them.
Bitcoin has remained close to $65,000 throughout the past week, enduring a sell-off that erased $797 billion from major U.S. tech stocks, along with the bankruptcy filings of blockchain firms Movement Labs and Storj, and the closure announcements from crypto exchanges BitMEX and BitMart.
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Crypto Flows, Share and the Selective Rotation
Crypto Flows, Share and the Selective Rotation
Markets repositioned since June, but Binance held share (~55% user funds, ~24% spot) and drew net inflows in early July while the tracked market saw outflows.
By CoinDesk ResearchJul 22, 2026Markets repositioned since June, but Binance held share (~55% user funds, ~24% spot) and drew net inflows in early July while the tracked market saw outflows.
Why it matters:
Markets repositioned since June, but Binance held share (~55% user funds, ~24% spot) and drew net inflows in early July while the tracked market saw outflows.
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