Bitcoin’s Long-Term Bullishness Evaporates From Options Market as Inflation Concern Rises

Bitcoin’s long-term bullish outlook is wavering, as evidenced by the recent shift in the 180-day skew of Deribit options. This metric, measuring the implied volatility difference between call and put options, has returned to zero, signaling a change from bullish to neutral sentiment. This mirrors the situation preceding the 2022 bear market, according to Griffin Ardern of BloFin. The options market now perceives a reduced likelihood of Bitcoin establishing a long-term uptrend and reaching new highs.

The neutral skew might be partially attributed to the increased use of covered call strategies, where selling call options generates additional yield. This activity can suppress call implied volatility relative to puts.

Adding to the uncertainty, Bitcoin’s price recently dropped over 4%, approaching its previous high, fueled by concerns about the economy. The June core PCE inflation data, coupled with disappointing nonfarm payrolls, heightened these concerns, pushing short-term skews negative as traders sought downside protection.

Ardern points to “supply chain impulses,” particularly the impact of past tariffs, as a contributing factor to persistent inflationary pressures. While falling auto prices temporarily offset other price increases, the inflationary effects are spreading, impacting retailers and eventually consumers, albeit with some delay. JPMorgan analysts concur, projecting global core inflation to reach 3.4% in the second half of 2025, largely due to tariff-related U.S. inflation spikes. This persistent inflation could hinder the Federal Reserve’s ability to cut interest rates, a factor that contrasts with Donald Trump’s criticisms of the current rate levels.

Upcoming economic indicators, including the ISM non-manufacturing PMI, July CPI, and PPI releases, will provide further insights into inflation and its potential impact on Bitcoin’s price trajectory. While some analysts still maintain bullish predictions for Bitcoin in the short term, the shift in long-term options sentiment highlights a growing uncertainty and cautious outlook for the future of the cryptocurrency. The market is clearly less confident about Bitcoin’s sustained upward momentum, and a potential bear market in 2026 remains a possibility.