Crypto Options Positioning, Volatility, and BTC Price Levels in February 2023

Summary

This weekly market note interprets Bitcoin and Ether options alongside macro conditions for the week of February 26, 2023. It describes rising bond yields and hawkish Federal Reserve expectations as pressure on risk assets, while noting that crypto had diverged from broader risk markets. For Bitcoin, the author highlights $22,000 and $25,000 as potential levels for faster price movement, and reads a steeper term structure, more symmetrical skew, and falling implied and realized volatility as signs of uncertainty and expected quieter trading. The author still favors the possibility of long options if price breaks those levels with supportive macro conditions.

The flow discussion reports selling in near-term calls and some put protection, alongside longer-dated upside call interest and short at-the-money positions paired with upside wings. It also summarizes options activity and market-making vault performance on Lyra. These are dated observations and opinions, not a tested strategy; the note gives no systematic entry, exit, or risk rules. Its price views and cited flows are specific to that week and may not generalize.

Key ideas

• The note links higher yields and expectations for further rate increases to a risk-off backdrop for crypto.
• It identifies Bitcoin levels below $22,000 and above $25,000 as possible catalysts for faster price movement.
• The author observes falling implied and realized volatility and a more symmetrical options skew.
• Reported flows include near-term call selling, protective puts, and longer-dated upside exposure.
• The market views are dated commentary without systematic trading or risk rules.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.