Three clues from the options market suggest Bitcoin may be carving out a “real” bottom—but they also hint that fireworks are unlikely.
Options positioning, volatility metrics, and term structure together paint a picture of a market that expects Bitcoin to grind higher rather than explode into a parabolic rally. In other words: traders are hunting for a genuine low, but they are not pricing in a euphoric blow-off top any time soon.
At the center of that message is a large, structured bet: roughly 20,000 BTC in notional call condor block trades executed on Deribit. These trades are designed for Bitcoin to end up between $100,000 and $118,000 by December 2025. That’s a bullish target in absolute terms, but it is also a statement that the upside is finite.
A call condor strategy involves buying and selling four call options with the same expiration date but at different strike prices. Typically, a trader buys a lower-strike call, sells two calls at intermediate strikes, and buys a higher-strike call. The payoff peaks if the asset finishes somewhere in the middle of that strike range. The position benefits from a rally, but only up to a point—it explicitly assumes price gains will stall rather than continue into an unchecked melt-up.
This is why the structure matters: traders using a call condor are not betting on “Bitcoin to the moon.” They are betting on “Bitcoin higher, within a band.” In this case, the band is centered around six-figure prices, but the shape of the trade still screams “capped upside.”
Jake Ostrovskis, an over-the-counter crypto trader, summed up the shift in sentiment by noting that the once-popular idea of a powerful year-end “Santa rally” has largely been squeezed out of options prices. Instead of bracing for a vertical move into December, traders are preparing for a more orderly, range-bound advance that could extend through 2025.
Below are three key signals options traders are watching to judge whether Bitcoin is close to a durable low—and what kind of recovery might follow.
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1. Volatility Term Structure: From Panic Spikes to Calm Contango
The first major signal comes from the *term structure* of implied volatility—how expensive options are across different expiries.
During real market stress, short-dated options tend to get bid up aggressively. Implied volatility explodes in the front end, creating a steep downward slope from near-term to longer-term expirations. That pattern reflects fear: traders are desperate for immediate protection and are willing to pay a premium for it.
Recently, volatility gauges have been pointing in the opposite direction. Rather than a panic-driven spike in short-term implied volatility, the curve is relatively well-behaved and, at times, mildly upward-sloping into 2025. This “calmer” structure suggests participants expect price swings, but not a series of violent shocks.
For bottom hunters, that’s a nuanced signal. A genuine capitulation low is often accompanied by a blowout in short-dated volatility, then a fast normalization. Instead, what we see now is a market that has already priced out an imminent crash and is leaning toward steady, contained price action. That supports the idea that the worst may be behind Bitcoin—but it also tempers expectations for runaway upside.
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2. Skew and Put Demand: Fear Is Present, But Not Dominant
The second signal is *options skew*—the difference in implied volatility between puts and calls at similar distances from the money.
When traders are terrified of downside, out-of-the-money puts become very expensive relative to calls. Skew turns sharply negative, and put buyers dominate the flow. At major cycle lows, this “fear premium” in puts usually stands out.
Current data show a more balanced picture. There is still demand for downside protection, but it’s not at panic levels. The skew between downside puts and upside calls is modest rather than extreme, indicating that traders see risks on both sides of the market. They’re hedging against drawdowns, but they are also willing to sell volatility or structure upside plays, such as the call condor centered on the $100,000–$118,000 range.
This kind of measured skew suggests two things:
– The market is no longer gripped by the kind of outright fear typical of the depths of a bear market.
– Yet, traders are far from euphoric. They are not stampeding into upside calls at any price; they’re structuring bets that profit if Bitcoin rallies *within expectations*.
For those trying to identify a durable low, that combination can be constructive. It implies pessimism has eased without flipping into mania—a psychological backdrop often associated with early-stage recoveries rather than late-stage tops.
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3. Open Interest and Positioning: Structured Bets vs. YOLO Calls
The third signal comes from open interest and how traders are structuring their positions across strikes and maturities.
In explosive bull phases, options markets often see a flood of out-of-the-money call buying: cheap lottery tickets on ever-higher price targets. Implied volatility on far-out strikes can detach from fundamentals as traders chase upside exposure, sometimes fueling the very move they are betting on.
Today’s picture looks different. The significant presence of call condors and similar *defined-upside* strategies shows that sophisticated players are not simply spraying out-of-the-money calls. Instead, they are engineering trades that:
– Profit from a controlled rally,
– Limit maximum payout above certain levels,
– Potentially earn from volatility decaying as prices settle into a range.
The size of the condor block—around 20,000 BTC notional—is large enough to function as a read on broader sentiment. It doesn’t say “Bitcoin is dead.” It says “Bitcoin likely goes higher, but not in a way that shocks us.”
Open interest also appears more distributed along realistic strike clusters rather than clumped at extreme moonshot levels. That’s typical of a market that has done some price discovery and no longer believes in a single, wildly optimistic narrative for the near term.
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What a “Genuine Low” Looks Like in the Options Data
Putting these three signals together—term structure, skew, and positioning—yields a clearer picture of what options traders are waiting for before calling any dip a “genuine low.”
They want to see:
1. A short, sharp volatility shock that is quickly absorbed.
A final flush that sends near-term volatility spiking, followed by a rapid normalization, often marks capitulation. Without that kind of event, many traders remain cautious about declaring the bottom in.
2. Exaggerated put skew that later mean-reverts.
If puts become extremely expensive as fear peaks, and then that premium collapses as selling pressure exhausts itself, it’s a classic hallmark of a durable low.
3. Positioning shift from defensive to opportunistic—but controlled.
After capitulation, traders usually start rotating from heavy hedging to structured bullish strategies—not pure YOLO calls, but risk-defined upside plays, just like the large condor blocks now being observed.
The current landscape suggests we may already be in the last of those stages, or approaching it: hedges are still present, but more sophisticated upside structures are appearing, while expectations for a violent end-of-year surge have been dialed back.
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Why a Range-Bound 2025 Matters for Investors
The notion of a capped rally and range-bound 2025 doesn’t sound thrilling, but it has important implications.
A market that grinds higher within a band can be healthier and more sustainable than one that rockets up only to collapse. It tends to:
– Allow leverage to reset more gradually,
– Reduce the likelihood of forced liquidations,
– Encourage long-term accumulation rather than frantic speculation.
For investors with multi-year horizons, a slower, more predictable ascent can be a welcome change from the boom–bust extremes that have defined previous Bitcoin cycles. It provides more opportunities to build positions, hedge risk intelligently, and benefit from time-decay strategies in the options market.
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How Retail Traders Can Read These Signals
While institutional traders run complex models, retail participants can still extract practical insights from options data:
– Watch implied volatility across expiries.
A steep, panic-like spike in near-term volatility followed by normalization often coincides with major turning points.
– Monitor put–call skew.
When downside protection becomes extremely expensive and then cheapens, it can indicate that the market’s worst fears have been absorbed.
– Note the types of strategies gaining traction.
Rising interest in spreads and condors versus pure out-of-the-money calls generally points to expectations of capped or controlled moves rather than blowouts.
You don’t need to trade options to benefit from understanding this. These metrics serve as a real-time sentiment dashboard that can inform spot-buying and risk management decisions.
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Why the “Santa Rally” Narrative Has Faded
The fading of the year-end “Santa rally” narrative is not just about seasonal lore—it’s a reflection of how quickly markets adjust.
Earlier in the cycle, the idea of a powerful December surge into new highs was widely discussed. As macro data, regulatory news, and liquidity conditions evolved, traders steadily priced out that scenario. The absence of aggressively priced upside calls and muted short-term volatility now confirms that the market no longer believes in a guaranteed holiday melt-up.
Instead, traders are anchoring their expectations around a more extended timeline: gradual appreciation into 2025, with six-figure Bitcoin remaining plausible—but within structured, risk-defined bets rather than unbridled speculation.
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The Bottom Line: Cautious Optimism, Not Mania
The options market is not forecasting Bitcoin’s precise path, but it is sending a consistent message:
– Downside doom is no longer the dominant scenario.
– Upside is expected—but within boundaries.
– A clean, euphoric blow-off top is not currently priced in.
For those trying to time a “genuine low,” that means looking less for grand narratives and more for these technical tells: a final volatility spike and reset, fear-heavy skew reverting to normal, and the ongoing shift toward structured, capped-upside strategies like the large call condor block now in focus.
Taken together, these signals describe a market that is leaning bullish—just not wildly so. The real opportunity, in the eyes of options traders, may lie not in chasing a last-minute Santa rally, but in positioning early for a measured, range-conscious Bitcoin cycle that could define 2025.