Bitcoin has seen a notable decline in volatility as its price stabilizes near $70,000, but traders remain cautious, according to a new report from investment firm VanEck. The cryptocurrency’s realized volatility — a measure based on actual observed price movements — has dropped from 80 to 50 over the past month. Despite this calmer price environment, market participants continue to spend heavily on options that pay out if Bitcoin falls in value. The pattern suggests that caution has not yet given way to confidence among investors.
Total premiums paid to purchase put options — contracts that profit when an asset’s price declines — fell 24% compared to the previous month, yet still reached $685 million over the past 30 days. VanEck notes that this figure remains above 77% of monthly observations recorded since the start of 2025. In its report, the firm states that investors continue to allocate significant capital toward hedging downside risk even as volatility retreats. The elevated spending indicates that the reduction in premiums is relative rather than absolute.
The put/call ratio, which compares the volume of bearish bets to bullish ones, climbed as high as 0.84 and averaged 0.77 during the period under review. VanEck identifies these as the highest readings since 2021, describing them as a sign of unusually strong demand for downside hedging relative to bullish positioning. A higher put/call ratio generally reflects a market leaning toward protection against losses rather than speculation on gains. The data paints a picture of a market that remains defensive despite stabilizing prices.
However, VanEck’s report also highlights a potentially encouraging signal for Bitcoin bulls embedded within the same data. Historically, when options markets have displayed this level of fear, Bitcoin has tended to recover, according to the firm. VanEck writes that the current degree of defensiveness, while understandable given recent price action, has in the past been more characteristic of market bottoms than market tops. This historical pattern may offer some reassurance to longer-term holders of the asset.
Additional data points to a slowdown in selling pressure from committed holders. Bitcoin transfers among wallets belonging to holders of at least one year showed a month-over-month decline, which VanEck says suggests that long-term holders parting with their holdings appears to be slowing. Reduced selling from this cohort is often interpreted as a sign of conviction among experienced market participants. It may also limit the supply of Bitcoin available on the open market.
Bitcoin has slipped nearly 1% over the last 24 hours but remains more than 5% higher over the past month, most recently trading at $69,891. At that price, the asset sits approximately 45% below its all-time high of $126,080, which was set last October. The gap between current prices and the record peak underscores the scale of the drawdown that has contributed to the cautious sentiment reflected in options markets. Whether the historical pattern identified by VanEck plays out remains to be seen as traders continue to weigh risk carefully.
Originally reported by Decrypt.
