Bitcoin Price Trend Shift: Waning Dominance of Options, Market Reverts to Caution

Over the past two years, the boom in the options market has been seen as a key force influencing Bitcoin price movements. From expanding trading volumes to increased open interest, every move in options has the potential to stir the spot market. However, this situation is now undergoing a significant change—options’ ability to control price has noticeably declined, and the underlying logic behind Bitcoin’s price trends is subtly shifting.

Significant Drop in Options Open Interest, Clear Decline in Control Ability

According to the latest analysis from Matrixport, Ethereum options open interest peaked in August 2025, while Bitcoin options open interest reached its high in October 2025. Over the following three months, options-related positions in both markets rapidly declined, as deleveraging risk adjustments continued to advance. The most direct manifestation of this change is that Bitcoin’s nominal options open interest has plummeted from approximately $52 billion to about $28 billion, a nearly 50% decrease.

What does the shrinking open interest imply? Simply put, it means that the capital and betting scale invested by options traders have significantly decreased. When this force weakens, the influence of options on spot price volatility naturally diminishes. In other words, the pricing power of Bitcoin’s price movements is gradually shifting back from the options market to the spot market.

Change in Capital Allocation Logic, Noticeable Slowdown in Entry Pace

Capital behavior often reflects the true thoughts of market participants. Behind the data changes lies a slowdown in the pace of capital entering the market and a more selective approach to new position allocation. This is not merely capital exiting but a strategic adjustment—shifting from aggressive continuous adding to a more conservative, phased build-up.

This cautious attitude is especially evident in the options market. Although many traders still buy call options to express bullish expectations for the future, both the main participants and the scale of such operations are shrinking. In contrast, the previously widespread “long futures + put options hedging” strategies are gradually being unwound. The decline of these hedging positions further accelerates deleveraging.

Disintegration of Hedging Portfolios and Market Structure Changes Driven by Deleveraging

Ethereum market has shown particularly typical characteristic shifts. Previously, long futures positions were often paired with put options as risk hedging tools, forming relatively stable combined positions. Currently, such hedging strategies are being dismantled step by step, as traders reassess their risk exposure.

What does this phenomenon indicate? It suggests a change in traders’ risk management mindset. Moving from the past “large leverage + options hedging” to “precise allocation + light positions,” the overall leverage level in the market is decreasing, and the risk structure is being optimized. Deleveraging has evolved from passive selling pressure to a more active adjustment of positions.

Market Turning Point Emerges, Cautious Sentiment Dominates Trading Decisions

This series of changes collectively signals a clear message: the driving logic behind Bitcoin’s price trend is shifting, with market sentiment gradually moving away from aggressive leverage expansion toward risk management and position optimization.

Options are no longer the dominant force that once commanded the market. Instead, a more diversified and rational capital allocation pattern is emerging. Traders are becoming more cautious in assessing risks and more selective in establishing positions, reflecting a market participant mindset that is becoming more rational and conservative about future trends. In this market context, Bitcoin’s price volatility may increasingly depend on fundamental factors and real supply and demand in the spot market, rather than being driven unilaterally by options leverage.