Bitcoin’s decline below $78,000 after rejecting near recent local highs has caused options traders to take more cautious positions, according to up-to-date data released by Glassnode. The firm said the options market continues to exhibit compressed volatility expectations, elevated demand for downside protection, and a gamma structure that could amplify weakness if BTC approaches the $75,000 mid-range area.

This move follows a failed attempt to stay near the upper end of the recent local range. While spot price action has subsided, Glassnode’s thread focused on what derivatives positioning suggests beneath the surface: investors continue to pay for protection rather than aggressively chase growth.

“BTC Drops Below $78K After Rejecting Near Recent Local Highs,” Glassnode he wrote. “Here’s What BTC Options Data Shows About Positioning, Volatility Expectations, and Sentiment Below the Surface.”

Bitcoin options traders remain defensive

One of the clearest signals came from implied volatility. Glassnode said BTC implied volatility is falling again after a brief rebound earlier in the week. Weekly implied volatility is now near 31%, down from 39% at the start of the week, while longer-term implied volatility has also fallen slightly lower.

This means the market is not yet pricing in a disordered breakout in either direction, even if downside protection remains elevated. “The market is again pricing in a calmer environment in the short term,” Glassnode said.

However, this calmness is not the same as bullish positioning. Glassnode said the 25 delta deviation remains “definitely in trade territory” after rejecting close to $82,000. The weekly deviation briefly touched 24% before easing, meaning there is a forceful call premium to continue trading.

“Traders continue to favor downside protection,” the company wrote.

The same caution occurred with Glassnode’s skewness coefficient, which compares upside and downside implied volatility. Most tenors remain below 1, which means puts are richer than calls. The exception is the six-month period, where the indicator still shows a call premium, suggesting that longer-term growth demand has not completely disappeared.

Short-term positioning is more defensive. Glassnode said that outside long-term structures, upside demand remains subdued, while the broader options space continues to indicate that investors are seeking protection from further declines.

Realized and implied volatility also differ. One-month realized volatility has fallen to 27%, while one-month implied volatility remains closer to 35%. According to Glassnode, this means the volatility risk premium is near recent highs.

“Options continue to price in more traffic than BTC has recently delivered,” the firm said.

The gamma profile adds another layer of risk. Glassnode has identified a vast compact gamma cluster near $75,000, with negative sub-spot exposure of approximately $3.2 billion. In options markets, compact gamma can force dealers to hedge in a way that magnifies spot moves, potentially increasing volatility if price approaches key levels.

At the same time, positive gamma clusters near $78,000 and $80,000 could act as resistance. This setup leaves Bitcoin trapped between nearby upward friction and a lower zone where the downward move could accelerate.
“This structure could accelerate downside volatility near 75,000.” – wrote Glassnode.

Inflows have also tilted towards the defensive over the past week. Put calls were slightly ahead on the tape, accounting for 25% of the premium, while purchased calls also accounted for 25%. Call sales remained elevated at 25.7%, reinforcing the picture of pent-up appetite for growth.

Glassnode’s conclusion was direct: implied volatility on the front continues to shrink, the volatility spread widens, skewness remains in sell territory, only the six-month skewness coefficient shows the call premium, it is floating defensively, and the compact gamma acceleration zone is below spot.

For traders, the takeaway is not about straightforward panic, but about asymmetry. Bitcoin options are not pricing in a significant raise in volatility in the near term, but the market continues to pay for downside protection and shows confined confidence in near-term upside. If the spot trade fails to reclaim the nearby resistance zones around $78,000 and $80,000, the options market appears to be in a continued cautious position.

At the time of publication, the price of BTC was $76,744.

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