In this week's recap, Imran Lakha of Options Insight provides the latest insights into BTC and ETH derivatives markets. Step further into the technical setup, volatility shifts, and options market dynamics driving crypto's latest move — and what it could mean for Bitcoin’s path to $100K.
Over recent weeks, Bitcoin has shown signs of resilience and strength, reflecting a shift in the macroeconomic environment. The broader market narrative is now being driven by a weakening U.S. dollar and a general decline in the notion of "U.S. exceptionalism." As funds rotate out of U.S. equities and bonds, traditional safe-haven assets like gold have benefited — and Bitcoin appears to be following suit.
This new dynamic suggests that Bitcoin is increasingly behaving less like a high-beta risk asset and more like a digital version of gold. This decoupling from traditional risk assets marks a significant evolution in how Bitcoin is perceived by investors, with growing interest in its role as a hedge against systemic risk, inflation, and fiat depreciation.
Bitcoin has broken through a long-standing downtrend, clearing key resistance levels around $88.5K–$89K. As of now, it hovers just below $91K, and today's strong bullish candle suggests potential for a move into the mid-$90Ks — possibly even back toward $100K. Importantly, BTC is now trading above its 200-day moving average, further reinforcing its bullish technical setup.
This breakout is happening in the absence of broader risk-on behavior, underlining Bitcoin’s growing safe-haven narrative. The market's reaction to this move — especially in the options space — shows early signs of anticipation for further upside.
Unlike Bitcoin, Ethereum remains technically weaker. The asset continues to trade well below its 200-day moving average (around $2,800) and hasn’t broken through near-term resistance at $1,800. The ETH/BTC spread remains in a downtrend, reflecting Ethereum’s underperformance.
There is currently no strong narrative driving Ethereum higher. While it is benefiting somewhat from Bitcoin’s strength, it is clearly not leading the charge. Until a unique catalyst emerges for ETH — regulatory progress, major ecosystem development, or favorable macro headlines — Bitcoin is likely to remain the dominant crypto asset.
Realized volatility has dropped significantly this week. The rolling 7-day window for both BTC and ETH has seen sharp declines, with BTC realized at 35 and ETH at 55. This drop is largely due to large prior swings exiting the rolling window.
Front-end implied volatilities also drifted lower throughout the week, although today's spot move has rekindled some bid in options. Currently, Bitcoin front-end implied is flat on the day, while Ethereum is about 5 vols higher. Carry has turned positive again (~10 vols) for both assets, as implied has outpaced the now-lower realized vol.
Both BTC and ETH had been trading within their implied volatility ranges, but the recent breakout hints at the potential for more dynamic price action. The question now is whether this rally will be orderly or if it will drive a sharp rise in volatility — especially if Bitcoin sustains levels above $90K and pushes toward $100K.
Historically, Bitcoin rallies often lead to a spot-up, vol-up dynamic, where implied volatility increases alongside rising prices — a rare but powerful market phenomenon that traders are beginning to price in.
In the options market, Bitcoin maintains a healthy contango (longer-dated implied vols higher than short-dated), while Ethereum shows slight front-end inversion. This suggests expectations for more near-term activity in ETH relative to the back end.
Skew has flipped meaningfully over the past week. Previously, puts commanded a premium in the front end; now, calls are trading richer — particularly in Bitcoin. The skew curve flattening shows a transition from defensive positioning to speculative upside exposure. BTC skew is showing 1–2 vol call premium across the curve, while ETH has front-end call bid but is still slightly in put premium mid-curve.
This skew behavior highlights that traders are pricing in upside tail risk in crypto, potentially driven by a catch-up rally as Bitcoin aligns more closely with gold.
The BTC/ETH volatility spread remains significant in the front end, sitting over 25 vols. This aligns with realized data, where ETH is realizing more than 20 vols above BTC. However, the back end shows a tighter spread (13–14 vols), suggesting that long-term expectations are more balanced.
Spot spread (ETH/BTC) hit levels not seen since the COVID crisis, underlining ETH’s current underperformance and the ongoing bear market dynamic across altcoins.
Although regulatory clarity is still lacking, and political developments (notably in the U.S.) remain a source of uncertainty, there is a sense that eventual liquidity injections and monetary easing could reflate risk assets — crypto included.
Currently, all the action is in the short end of the curve. Institutional flow has focused on short-dated upside call buying in Bitcoin, positioning for a gold-like breakout. Long-dated call interest in ETH, typically a follow-on indicator, is still absent. Should BTC break and hold above $90K with conviction, expect a wave of ETH September call buying to follow.
Bitcoin’s technical breakout, its growing role as a safe haven, and the volatility structure in options markets all point toward a regime shift. If BTC can maintain strength above $90K and approach the psychological $100K level, volatility is likely to rise, and Ethereum may finally start to catch up.
For now, the crypto narrative is singularly focused on Bitcoin’s resurgence, with Ethereum and altcoins still waiting for their moment. Options markets are beginning to reflect that optimism, but the next few weeks will be crucial in determining if this is a sustainable breakout or another false dawn.