Bitcoin’s Long-Term Bullish Outlook Fades as Options Market Turns Neutral Amid Inflation Fears

The once-confident long-term bullish stance in Bitcoin’s options market is showing signs of erosion, as traders brace for rising inflation and economic uncertainty in the second half of 2025.

Data from Amberdata shows the 180-day skew — a measure of the difference in implied volatility between out-of-the-money calls and puts listed on Deribit — has fallen to zero. This shift signals a move from bullish to neutral sentiment among options traders regarding Bitcoin’s longer-term trajectory.

According to Griffin Ardern, head of options trading and research at BloFin, the change mirrors conditions seen at the beginning of Bitcoin’s last bear market.

“We’re seeing warning signs emerge,” Ardern told CoinDesk. “The long-dated bullish sentiment in Bitcoin options has completely vanished. It suggests traders are no longer confident in BTC’s ability to establish a sustained uptrend in the coming months.”

He added, “A similar scenario played out in January and February 2022 — just before a prolonged market correction.”

Understanding the Skew Shift

In the options market, a positive skew typically signals greater demand for calls — a bullish sign. A neutral or negative skew implies rising demand for puts, which offer protection against downside risk.

One factor driving the flattening skew is the growing popularity of structured products that sell out-of-the-money call options to generate yield on top of spot BTC holdings. This “covered call” strategy puts downward pressure on call option implied volatility, contributing to the neutral tone in the 180-day skew.

Macro Headwinds Reinforce Caution

Bitcoin’s price dropped over 4% last week, nearing support at $11,965, amid renewed macroeconomic headwinds. June’s core PCE — the Federal Reserve’s preferred inflation gauge — rose unexpectedly, while weak nonfarm payroll numbers added to concerns about the health of the U.S. economy.

The decline pushed short-term skew into negative territory, indicating that traders are increasingly turning to puts for near-term downside protection.

Ardern noted that inflationary pressure tied to global supply chain disruptions is already filtering through to U.S. economic data. “Although falling car prices helped balance out June’s CPI, the broader cost increases are already making their way through the system,” he said. “Tariffs, shipping bottlenecks, and other logistics costs are starting to be passed on to consumers.”

While some wholesalers and commodity firms are working to absorb the impact, Ardern warned that price increases are likely to persist — even if delayed.

Tariffs and Inflation in Focus

JPMorgan analysts have also flagged renewed inflation risks. The investment bank expects global core inflation to rise to an annualized 3.4% in the second half of 2025, largely due to new tariffs introduced by former President Donald Trump. These cost pressures are expected to disproportionately affect the U.S. economy.

A fresh spike in inflation could complicate the Federal Reserve’s path to easing interest rates. Trump has repeatedly criticized the Fed for maintaining its benchmark rate at 4.25%, which he argues is hampering growth.

Key Data Ahead

Traders are now closely watching upcoming economic data for further clarity. The ISM non-manufacturing PMI, due later Tuesday, will offer insight into price pressures in the service sector — a major component of U.S. inflation. The July CPI and PPI prints, expected later this week, will further shape the macro narrative and influence sentiment across risk assets.

For now, the options market is flashing caution. With long-dated bullish bets evaporating and inflation risk back in focus, Bitcoin’s long-term upside outlook may remain subdued — at least until clearer macro signals emerge.