In short
- Bitcoin volatility has declined, but data shows traders are preventing a downside move.
- The size of bets on Bitcoin is decreasing compared to increasing, a level not seen since 2021.
- Nonetheless, this level of ‘defensiveness’ is usually a sign that the bottom is near.
Volatility has eased as the price of Bitcoin has stabilized around $70,000, but traders are still paying for downside protection. According to a new report From investment firm VanEck.
VanEck pointed out that Bitcoin’s realized volatility, or volatility based on actual observed price movements, has fallen from 80 to 50 over the past month. But despite price stabilization, traders are still cautious and paying large premiums to hold positions that pay off when Bitcoin falls.
“Traders continue to pay significant premiums for downside protection,” the report says. “Gross premiums paid to purchase put options decreased 24% month-over-month, but at $685 million over the past 30 days, it remains above 77% of monthly observed levels since early 2025.”
That means the total dollar amount paid to bet on Bitcoin has decreased, but is still well above typical monthly levels.
“Despite declining volatility, investors continue to allocate significant capital to hedge downside risk,” VanEck wrote.
Not only are total premiums at significant levels, but the put/call ratio, which compares decreasing betting volume on Bitcoin to increasing betting volume on Bitcoin, has jumped to a high of 0.84 and averaged 0.77. VanEck said these numbers are the highest since 2021 and indicate “unusually high demand for bearish hedging compared to bullish positioning.”
However, there may be some relief lurking in the data on Bitcoin’s strength.
“In the past, when options markets have been this fearful, Bitcoin has tended to recover,” the report says. “Current levels of defensiveness are warranted by recent price action, but historically they have marked periods closer to market lows than market highs.”
Moreover, the number of long-term holders parting ways with their BTC “appears to be slowing down,” as Bitcoin transfers between holders for at least a year or longer decline monthly.
The top cryptocurrency asset is down nearly 1% in the last 24 hours, but has also risen more than 5% in the past month, recently trading at $69,891.
At this level, it is still nearly 45% off the all-time high of $126,080 set last October.
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