Options Traders Pull Back on Long-Term Bitcoin Bets as Inflation Risk Intensifies

Bitcoin’s Long-Term Bullish Momentum Stalls as Options Market Turns Neutral

Bitcoin’s long-term outlook has cooled sharply, with derivatives data signaling a shift from optimism to caution. As inflation risks re-emerge and macro uncertainty builds, sentiment in the options market has turned neutral, reflecting growing hesitation about BTC’s ability to sustain an extended rally.

The change is most evident in the 180-day skew, a metric tracking the difference in implied volatility between out-of-the-money call and put options on Deribit. According to Amberdata, that skew has now dropped to zero—an indication that traders are no longer favoring bullish upside in longer-dated positions.

Options Market Signals Waning Confidence

Griffin Ardern, head of options trading and research at BloFin, said the neutral shift is a red flag—one not seen since the early stages of the 2022 bear market.

“The bullish sentiment in long-dated Bitcoin options has evaporated,” Ardern told CoinDesk. “This suggests market participants don’t believe BTC can build a strong uptrend in the near term. The odds of seeing new highs in the coming months are fading.”

In options parlance, a positive skew reflects demand for calls—often seen in bull markets. A flat or negative skew shows either uncertainty or preference for downside protection, typically through puts.

Covered Call Strategies Pressuring Skew

Part of the shift may be structural. Structured products that generate yield by selling call options—known as covered calls—have become more popular. This strategy can suppress call-side implied volatility, flattening the skew even if spot holdings remain unchanged.

Inflation and Tariff Worries Pressure BTC

Last week, Bitcoin slid over 4%, approaching former support levels near $11,965. The drop followed a stronger-than-expected rise in the Fed’s preferred inflation gauge—the core PCE for June—and weak U.S. employment data. Both have fueled concern that inflation may prove sticky, complicating the macro backdrop for crypto.

Short-dated skews have also turned negative, showing increased demand for downside hedges.

Ardern noted that inflationary pressure stemming from supply chain stress is already visible. “Retailers are beginning to pass on the cost burden from tariffs and logistical delays,” he said. “Even though falling auto prices helped last month’s CPI, price hikes are still on the way—just delayed.”

Tariffs Could Delay Fed Easing

JPMorgan analysts expect global core inflation to rise to an annualized 3.4% in the second half of 2025, driven largely by renewed U.S. tariffs introduced by Donald Trump. The investment bank warned that these cost increases will be concentrated in the U.S., potentially tying the Fed’s hands when it comes to interest rate cuts.

Trump has repeatedly criticized the Fed’s 4.25% policy rate, but the inflationary impact of trade policy may prevent any near-term easing.

Traders Watch Key Data This Week

Investors are closely monitoring a series of upcoming data releases, starting with Tuesday’s ISM non-manufacturing PMI, which will offer insights into inflation trends in the services sector. Later this week, July’s Consumer Price Index (CPI) and Producer Price Index (PPI) reports will provide more clarity on the inflation path and its impact on monetary policy.

Outlook: Neutral for Now

With bullish sentiment eroding from long-dated options and macro risks stacking up, Bitcoin’s long-term trajectory appears uncertain. Unless inflation eases or the Fed signals a pivot, BTC may remain rangebound—lacking both upside conviction and strong downside momentum.