Bitcoin’s price action remains fragile as the market eyes a potential fifth straight monthly loss. The flagship crypto is consolidating below $70,000, with bulls unable to push a convincing breakout while traders brace for further downside even as panic-driven volatility cools. Glassnode’s weekly options-market update (posted Feb. 20) shows a clear shift: traders are dialing back bets on an immediate crash, but they’re still buying protection. Key takeaways from the options data - Implied volatility is retreating: At-the-money (ATM) implied volatility across maturities has fallen to roughly 48% from recent highs. (ATM IV reflects the market’s expected move over an option’s life.) - Aggregate volatility expectations easing: DVOL — Glassnode’s gauge of combined implied volatility — slid about 10 volatility points over the past two weeks after spiking during late-January/early-February liquidations. - Short-term risk premium recovered: The one-week volatility risk premium (VRP), which earlier plunged to around -45 when realized volatility outpaced implied, has returned to positive territory as realized volatility stabilized and implied vol repriced higher. Taken together, these shifts suggest the market is moving out of “panic pricing.” Traders are no longer pricing in immediate, outsized swings the way they were during the recent liquidation episode. But defensive positioning remains - Put demand still dominates: The put skew (which measures demand for downside protection versus upside exposure) has climbed back from near 7 vol to about 14 vol for the one-week 25-delta skew — a sign that demand for downside insurance is persistent even if extreme fear has faded. - Puts made up most activity: Last week, put options accounted for roughly two-thirds of options flow, with outright put buying representing about 34% of total flow. That defensive posture suggests many participants aren’t yet convinced the correction is over. - Dealers are short gamma across a wide band: Market-makers are broadly short gamma between roughly $70,000 and $58,000 — a structure that can amplify selling pressure if prices move lower. Conversely, there’s a large gamma concentration around $75,000 that could support a rebound if prices push back up. Bottom line The options market is signaling a more measured outlook: the immediate threat of extreme volatility has diminished, but traders remain hedged against further downside. At press time, Bitcoin was trading at $67,628, up about 0.92% over the past 24 hours. Read more AI-generated news on: undefined/news

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