BTC 25 Delta Skew - Weekly Analysis
Bitcoin Price & Weekly 25 Delta Skew
What is BTC 25 Delta Skew?
Definition: BTC 25 delta skew measures the difference in implied volatility between 25-delta Put and Call Bitcoin options, normalized by at-the-money implied volatility. It's a key indicator of market sentiment in Bitcoin options trading.
This chart shows the BTC-USD price alongside the weekly 25 delta skew from the Deribit Bitcoin options market. The skew reveals how options traders are positioning themselves for potential price movements over the next 7 days.
How to Read Bitcoin Options 25 Delta Skew
- Positive skew values: Higher demand for Put options, indicating bearish sentiment or hedging against downside risk
- Negative skew values: Higher demand for Call options, suggesting bullish sentiment and expectations of upward price movement
- Skew approaching zero: Balanced market sentiment between bullish and bearish positioning
When demand for Puts exceeds demand for Calls, implied volatility for Puts increases, resulting in positive skew. Conversely, when demand for Calls is stronger, which typically occurs when the market anticipates upward movement, the skew turns negative.
Compare BTC 25 Delta Skew Across Different Timeframes
For a more comprehensive view of market sentiment, compare the weekly 25 delta skew with longer timeframes:
- Track medium-term sentiment with the BTC 25 delta skew monthly analysis
- Monitor quarterly positioning through the BTC 25 delta skew 3-month data
- Analyze long-term market expectations with the BTC 25 delta skew 6-month trends
Key Insight
Bitcoin 25 delta skew is particularly valuable when analyzed alongside price action. Divergences between skew readings and price movement often signal potential trend reversals or continuation patterns.