From Panic to Positioning: How BTC Options Are Pricing the Next Move

Weekend Shock, Fast Recovery: BTC Rebounds Amid Geopolitical Turmoil

Bitcoin briefly fell below $100K over the weekend, touching $98K – its sharpest drop since May. The move was triggered by Iran’s threat to shut down the Strait of Hormuz, a vital oil supply route, which sparked $1B in liquidations across the market.

But BTC quickly rebounded to $105K, signalling strength as investors reversed risk-off positioning. While geopolitical risks remain, markets now appear to be pricing in stability rather than escalation.

Elsewhere, momentum is quietly building on the regulatory front. The U.S. Senate just passed the GENIUS Act – a major step toward a federal stablecoin framework. The bill now heads to the House and could speed up much-needed clarity for crypto regulation.

States are also stepping up. Ohio passed the Blockchain Basics Act, introducing tax breaks for small crypto transactions and protecting miners – another sign of growing Web3 support at the state level.

In short, Bitcoin is navigating a volatile mix of geopolitical uncertainty and regulatory evolution. But with $100K holding and key legislation advancing, the outlook is turning increasingly constructive.

Volatility Reawakens: Weekend Swings Liven Thing Up Again

Realized volatility dropped into the weekend but spiked sharply, ending the week up nearly 10 points;

• BTC front-end volatility found support as gamma exposure kicked in, while ETH vols drifted slightly lower.
• Weekend swings flipped carry into negative territory.
• ETH repeatedly breached implied volatility ranges, with BTC also showing a few large outliers.
• Price action suggests BTC may have found a local bottom around $98K.
• With geopolitical fears fading, markets may be ready to refocus on favourable regulatory developments.

Skew Shifts and Sentiment: Traders Rotate Back to Calls

Skew curves have diverged following the market’s sharp reversal on easing geopolitical tensions;

• At the lows, 1-week put skew spiked to 6 vols in BTC and 10 vols in ETH before sentiment turned.
• BTC skew shifted higher across the board, with front-end still showing slight put bias, while longer-dated options moved to a 2-vol call premium.
• ETH’s curve steepened as the break below 2400 triggered more downside protection buying. Front-end skew remains near a 4-vol put premium.
• Both BTC and ETH skew curves turn into call premium territory heading into August expiries.

ETH/BTC Spread: BTC Upside Likely to Find Buyers

ETH/BTC remains rangebound but has avoided slipping back into a downtrend;

• BTC’s realized vol is finally picking up, softening the short-term vol spread between the two assets.
• The long-term vol spread remains elevated near 20 points – still expensive, but holding steady.
• ETH puts gained traction, pushing the RV skew curve lower, while BTC calls bounced back.
• If BTC breaks to new highs, current upside vol levels are likely to attract buyers.

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