Bitcoin fell below $54,000, and stocks sold after the emergence of new COVID-19 variants

The cryptocurrency exchange Deribit is the absolute leader of Bitcoin (Bitcoin) In the options market, on November 24, the 25% delta skew indicator indicated that the sentiment of professional traders “has become more pessimistic in general.”

Since November 9, the price of Bitcoin seems to be following a downward channel, so the “bearish” signal may reflect a 22% decline since the all-time high of $69,000.

Bitcoin/USD price on Bitstamp. Source: TradingView

A 25% delta skew compares both call (buy) and put (sell) options. When the premium of a protective put option is higher than that of a risk-like call option, it will turn positive, thereby indicating bearish sentiment.

When market makers tend to be bullish, the opposite is true, which causes the 25% delta skew indicator to enter a negative range.

Bitcoin’s 30-day 25% delta skew. Source:

Readings between minus 8% and plus 8% are generally considered neutral, so Deribit’s analysis is correct because it points to a considerable shift towards “fear” on November 23. However, with the indicator now stabilizing, this trend slowed by 8% on November 26 and no longer supports the bearish stance of traders.

What happened in the futures market?

In order to confirm whether this trend is specific to the instrument, the futures market should also be analyzed.

The futures premium-also called the “base rate”-measures the difference between long-term futures contracts and current spot market levels. In a healthy market, the annualized premium is expected to be 5% to 15%. This situation is called a futures premium.

This price gap is caused by sellers asking for more money to suspend settlement for a longer period of time. Whenever the indicator disappears or becomes negative, a red alert will appear, which is called a “rollback”.

Bitcoin 3-month futures benchmark interest rate. Source:

Unlike the 25% delta skew of options that have turned into “fear”, the main risk indicator of futures was relatively stable at 11% from November 16 to 25. Despite a slight decline, its current 9% is on the futures market and is not even close to a bearish tone.

Traders mostly use call options

One can only guess why professional traders and market makers who use the Bitcoin options market charge too much for put (sell) options.Maybe they worry that after the U.S. Senate committee seeks imminent risks Stable currency issuance information November 23.

On the same day, the Board of Governors of the Federal Reserve System announced a series of “policy sprints” aimed at solving Regulatory clarity in the crypto industry. Administrative agencies may adjust the compliance and implementation standards of existing laws and regulations.

Nevertheless, this does not explain why these uncertainties are not reflected in the Bitcoin futures market. Therefore, one must question whether the 25% skewness indicator should be ignored in this case.

Bitcoin has an open position on the 31st of December. Source:

Bitcoin options expiring on December 31 hold 60% of the current open positions, with a total exposure of $13.4 billion. As shown in the graph above, there is little interest in put (sell) options above $60,000.

Considering that the call (buy) option is 145% larger than the protective put option on December 31, one should not worry too much about how market makers will price these instruments. Therefore, despite Deribit’s bearish alert, the 25% delta skew should be less important now.

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