Warning Signals in Bitcoin Options as Traders Anticipate Volatility

As Bitcoin trades steadily near the $91,000 mark, the derivatives markets are conveying a more anxious outlook. While the spot price holds steady within a tight range, options traders are indicating increased short-term risks. This trend reveals a growing unease that a significant market shift might be approaching.

Key Takeaways:

Bitcoin is trading at approximately $91,000, showing a stable spot price amidst rising risk in derivatives markets.
A significant disconnect exists between calm spot price movements and increased demand for protection in options trading.
Medium-term volatility is decreasing, suggesting traders lack confidence in a sustained upward trend.
Short-term hedging has spiked, indicating heightened demand for protection against potential sharp declines.
The current market environment displays classic signs of a “calm before the storm,” with risks increasing as Bitcoin hovers below critical resistance levels.

This rewritten article maintains the original content while ensuring it's clear and comprehensible for beginners in the cryptocurrency space.

Bitcoin options flash warning as traders brace for sharp move

According to data from Glassnode’s options volatility heatmaps, there is a notable gap between Bitcoin's tranquil price performance and the increasing demand for protection within the derivatives market. This pattern has historically signaled potential periods of heightened market turbulence.

Bitcoin's Spot Price Struggles Below Resistance Levels

On the 12-hour BTC/USD chart, Bitcoin remains firmly below the $95,000 resistance level, unable to regain the highs reached in late 2025. Since the breakdown in November, the market has generated a sequence of lower highs, with any rallies stalling in the low to mid-$90,000 range.

Bitcoin 12-hour price trend

Source: TradingView

Trade volumes have also diminished, and momentum indicators, such as the MACD, are indicating a decrease in upward momentum. For those trading the spot market, Bitcoin appears to be consolidating peacefully; however, options traders are seeing a far less stable scenario.

Long-term Volatility Declines as Trader Confidence Weakens

The three-month implied volatility heatmap reveals that medium-term options pricing has been steadily decreasing since late 2025. The current volatility across various strike prices is near historical lows, suggesting that traders are no longer investing heavily in long-dated options.

Bitcoin volatility heatmap

Source: X/Glassnode

This scenario generally indicates a lack of directional conviction among traders. Typically, when traders anticipate a prolonged price increase, longer-dated volatility rises as they accumulate call options and structured investment positions. Currently, it seems that institutional traders are pulling back from aggressive long bets until a clearer market signal emerges.

Increased Demand for Short-term Hedging

The most pronounced signal emerges from the one-week implied volatility heatmap. Despite the low long-term volatility, now we are witnessing sharp spikes in short-dated options trading concentrated around and just below Bitcoin’s current price.

These spikes reflect a significant demand for near-term downside protection, suggesting that traders are preparing for potential price movements. This means that traders are acquiring put options and hedges that will become profitable if Bitcoin experiences a sharp decline in the coming days rather than over several months.

The contrasting volatility levels highlight a market that is not geared for a sustained trend but is instead highly responsive to an imminent market shock.

“Calm Before the Storm” Scenario for Bitcoin

When Bitcoin's price remains stable while short-term implied volatility increases, it illustrates mounting strain within the market. While spot traders may perceive a phase of consolidation, options traders are identifying risk lurking beneath the surface.

Historically, this dynamic foreshadows significant price movements, especially when the asset is trading just below key technical resistance levels, as is the case near $95,000 today. With liquidity thinning, momentum decreasing, and demand for hedging rising, the derivatives market is hinting that Bitcoin’s current stability may soon be disrupted.

Conclusion

As traders navigate the complexities of the Bitcoin market, the current signs in both spot and derivatives trading point to a potentially volatile future. Keeping an eye on these indicators will be crucial as the landscape evolves.