Bitcoin has risen from a low of around $58,500 on June 30th and is trading around $66,000 at the time of writing.
Option traders are still paying high premiums to protect against another leg down, and traders in the perpetual futures market have resumed paying to hold leveraged long positions.
Both readings are in the middle zone, far from the extreme values that marked Bitcoin’s previous lows. This setup describes a market with enough optimism to rebuild leveraged exposures and enough fear to keep hedges expensive, a pre-capacity trap between recovery and capitulation.
the price of protection
A one-month put option on Bitcoin, a contract that pays off if the price goes down, currently costs much more than an equivalent call option that pays off if the price goes up.
VanEck’s ChainCheck tracks that gap as a skew measure, and over the past month it has widened from 9.8 percentage points to 11.4 percentage points, which is the 83rd percentile of the measure going back to 2021.
One-month call volatility is around 35.5%, near the bottom of the range since 2021, while put volatility is much higher at 46.9%. This gap indicates that traders are allocating prices to downside risk apart from the expected significant increase in volatility.
Traders holding these puts will have to decide whether to continue paying a high premium or unhedge and trust in a rebound as the June lows are retested.
VanEck sorts past skew measurements into bands and tracks what happened next. Measurements between the 10 and 15 points where Bitcoin currently sits produced a median 30-day return of 1.4%, a 90-day return of -8.8%, a 180-day return of 15.3%, and a 365-day return of -19.1%.
More extreme fear levels, measurements above 15 points, had stronger results over 90-day, 180-day, and 365-day periods.
VanEck frames that 15-point level as a marker drawn from its own historical data set to explain what typically followed similar measurements in past cycles.
Rebuild long positions early
Perpetual futures financing, or financing that leverages periodic payments from long positions to short positions, turned positive again this month after remaining negative through much of the spring.
The 30-day annualized rate is currently near 4.5%, well below Bitcoin’s long-term average funding level. Leveraged long demand has returned, and positions are still lighter than the congestion seen prior to past declines.
Traders who bought Bitcoin during the last negative funding period from April 13 to May 23 paid an average of about $77,900. VanEck’s July data cutoff left them about 20% underwater, a rare case of historically lacking reliable entry signals.
The Fed’s next policy meeting will be held on July 28th and 29th, with interest rate decisions scheduled for the 29th. Markets have already priced in most of the key outcomes, with a Reuters poll of 104 economists conducted between July 17 and July 21 finding a unanimous expectation that interest rates would remain unchanged at 3.50-3.75 percent.
Bitcoin’s reaction to this statement and the subsequent press conference will indicate whether the rebound is strong enough to sustain.
Spot volume averaged about $5.1 billion a day, below the long-term average, in a macro test of a year that began with a deep first-half drawdown weighed down by ETF selling and Fed uncertainty.
The US-traded spot Bitcoin ETP has fallen by approximately 40,010 BTC over the past 30 days, with flows only turning slightly positive in early July. Gatherings built on this kind of participation have scope to prove their power after the conference passes.
| signal | Current measurement value | Content | why is it important |
|---|---|---|---|
| bitcoin price | After a low of around $58,500 on June 30th, around $66,000. | prices rebounded | A price recovery does not prove that the positioning has been reset. |
| 1 month put call skew | 11.4 percentage points | Downside protection remains expensive | Fear is rising, but not reaching VanEck’s extreme polarization zone above 15 pp. |
| 30 days PERP funding | Approximately 4.5% per year | Leveraged longs are paying out again. | Long exposure is about rebuilding before a clear breakdown signal. |
| Negative funding buyer | Entry price is approximately $77,900, approximately 20% submerged. | Previous “bottom” signal failed | Buying on the spur of the moment will require a further significant recovery before breaking even. |
| spot volume | Average of approximately $5.1 billion per day | Participation is below the long-term average | Rebounding still requires stronger spot confirmation. |
| Spot Bitcoin ETP Flow | Approximately 40,010 BTC decline in 30 days | ETF demand has not fully recovered | Weak flow support leaves a bull market vulnerable to macro disappointments. |
| Fed meeting | July 28th-29th | short term catalyst | Although this has been factored into the headline hold, there is still the possibility that Bitcoin will fluctuate in response to the guidance. |
Result sizing
In the bullish case, Bitcoin sustains gains through the Fed meeting and spot demand is strong enough to absorb last month’s ETP outflows.
Put-call skew is narrowing toward the 5-point range as the cost of downside protection declines and funding remains at moderate, uncrowded levels.
The June lows start to look like the cycle floor you would expect from VanEck’s historic band once a full-fledged reset takes hold.
In the bearish case, the rebound stalls at the Fed meeting, and leveraged longs built over the past month are at risk for the next liquidation. Funding turns negative again and the put skew widens by more than 15 points as traders bid more protection, causing Bitcoin to retest its June 30 low near $58,500.
| scenario | what happens | Notable signals | meaning |
|---|---|---|---|
| Bull case: rebound will be the bottom | Bitcoin continues to rise through the Fed meeting, with spot demand strengthening. | The skew is compressed towards 5 pp. Funding remains moderate. ETP flows turn convincingly positive. | June lows are likely to persist. |
| Base case: trap persists | Bitcoin remains range bound, but hedging remains expensive and it is slowly taking advantage of the restructuring. | Skew remains within the 10-15 pp band. Funding remains slightly positive. Spot volume remains soft. | Market prices have recovered, but not with confidence. |
| Bear case: rebound failure | Bitcoin retests June 30 lows near $58,500. | Funding turns negative. Liquidation increases. Make the skew move more than 15pp. | Rise is a break between declines. |
| Yield case: deeper reset | Macro shocks and ETF outflows force sharp flushes before recovery. | Skew spikes greater than 15 pp. Funding becomes significantly negative. Physical sales will accelerate. | The market finally reached extreme fear, which VanEck associates with stronger forward returns. |
April and May bulls will need a much bigger rally to break even, and traders who unhedged too early will do so just when the market is against them.
Bitcoin’s price has already recovered, and next week’s Fed meeting will answer whether its positioning has recovered as well.
(Tag translation) Bitcoin
