Bitcoin’s surge to $97,600 last week sparked a surge in bullish options activity, but Glassnode says the derivatives tape looked more like short-term positioning than broad belief. In a Jan. 23 thread, the on-chain analytics firm pointed to a disconnect between demand for front-end connectivity and longer-term risk pricing, which remained anchored in downside protection.

“Let’s take a closer look at the options market’s performance during last week’s move to 97.6K and how options indicators help gauge the conviction behind this move,” Glassnode wrote. The main conclusion: there was an upward flow, but it did not significantly change the way the market prices risk further down the curve.

What Bitcoin investors can learn from last week’s rally

First, Glassnode focused on short-term deviation. Around mid-January, the BTC price increased by about 8% in a matter of days, and the weekly 25-delta deviation sharply moved towards neutral from “deep territory”. This type of front-end change may look like a market rally until you check to see if the same sell-off is occurring with longer expirations.

“Be careful, though,” Glassnode warned. “The demand for near-obsolete connections is often misinterpreted as directional belief.” The thread linked this point to flow data: the put-to-option ratio dropped from 1 to 0.4, signaling an augment in call activity. However, as Glassnode puts it, the question is not whether the connections were bought, but how short-term that demand was.

The longer dated photo was much less enthusiastic. Glassnode found that the monthly 25 delta deviation “only moved from 7% to 4% at the low,” maintaining position asymmetry even as the 1-week deviation dropped from 8% to 1%. At the 3-month 25 delta shift, the shift was even smaller (less than 1.5%) and “remained firmly in sell territory,” continuing the asymmetric price decline.

For Glassnode, this discrepancy matters because it separates “flow” from “risk pricing.” Shares of the upside may be real, but unless the market reprices skewed to maturities, it suggests investors are not extending that optimism to a longer-term, more confident outlook.

The volatility tape reinforced the same message. “Including ATM implied volatility, we see volume being sold as price increases,” Glassnode wrote. “Gamma sellers profited from the rally. This is not volatility behavior typically associated with sustained breakouts.”

This combination: demand for front-end connectivity along with ample supply can be aligned with tactical positioning rather than regime change. This can also make cash movements more risk-prone if further purchases are not made after short-lived structures end.

Glassnode concluded with a checklist of what a cleaner breakout would look like: “The ideal breakout setup combines emphasis on key levels, an upward shift with conviction across maturities, and bid volatility. Last week’s move fell short of these conditions.”

For traders watching to see if BTC can rise to $97,600 again, the takeaway from this thread is straightforward: monitor if the longer-term bias starts to move out of sell territory and if implied volatility starts to be bid up rather than sold as the spot retests key levels.

At the time of publication, the price of BTC was $89,297.

Featured image created with DALL.E, chart from TradingView.com