Dr. Sean Dawson, head of research at onchain options platform, Derive.xyz (TVL $115.8M, $18.6B trade volume), has shared a Bitcoin and cryptocurrency market update.
Dr. Sean Dawson of Derive.xyz noted that Bitcoin (BTC) volume dropped 25% as the market seemingly reversed its panic selling.
They added:
“Markets are balancing on a knife’s edge, but sentiment has stabilised meaningfully as expectations of a rate cut continue to recover. The probability of a 25 basis point cut at the upcoming FOMC meeting collapsed to 39% just a week ago, yet has since surged back to nearly 87%. In response, BTC has staged a strong rebound, rallying more than 10% from $82K to $91.5K at the time of writing.”
Dawson also mentioned:
“This shift in macro expectations has eased some of the intense bearish pressure that dominated the options market through late October and November. The 25-delta skew, a key measure of relative demand for puts versus calls, has moved sharply off its lows:
- 30-day skew: from -7% to -5%
- 7-day skew: from -10% to -4%
They also noted that traders are still paying “a premium for downside protection, but noticeably less than last week, reflecting reduced fear and a partial unwind of defensive hedging as rate-cut odds firm.”
They continued:
“Volatility is cooling as well. The aggressive selloff through October and November drove short-tenor BTC ATM volatility as high as ~60% on November 21. Since then, volatility has compressed almost 25%, now sitting near 45%. This indicates that markets are pricing a lower probability of near-term disorder as liquidity improves and panic flows subside.”
Dawson further stated that derivatives flow data reinforces this shift.
On Derive.xyz over the past 24 hours (on this last Friday):
- 41.2% of BTC contracts were puts sold
- 26.5% were calls bought
- Only 23.1% were puts bought
- The remaining 9.2% were calls sold
They also stated that this positioning – “dominated by short puts and long calls – signals a meaningful uptick in trader confidence, with market participants leaning into a rebound rather than hedging against further downside.”
As covered, Derive.xyz (TVL $115.8M, $18.6B trade volume) is the self-described decentralized protocol that creates “programmable onchain options, perpetuals, and structured products.”
Co-founded by industry professionals Nick Forster, Jake Fitzgerald, Mike Spain and Dom Romanowski, it reportedly enables users with “accessible automated strategies to build, grow, and preserve wealth.”