Bitcoin volatility is down, but data shows that traders are protecting against moves to the downside.
The volume of bets on Bitcoin going down, compared to those on it going up, is at a mark not seen since 2021.
Nevertheless, this level of “defensiveness” has typically signaled that a bottom is near.

Bitcoin’s volatility has dropped as its price has stabilized around $70,000, but traders are still paying up for downside protection, according to a new report from investment firm VanEck. Bitcoin’s realized volatility, or volatility based on actual observed price movements, has fallen from 80 to 50 over the past month, VanEck notes. But despite stabilizing prices, traders are still cautious and are paying large premiums to maintain positions that pay when Bitcoin goes down. “Traders continue to pay significant premiums for downside protection,” the report reads. “Total premiums paid to purchase puts declined 24% month-over-month, but at $685 million over the past 30 days, they remain above 77% of monthly observations since the start of 2025.”

In other words, while the total dollar amount paid to make bets on Bitcoin going down has decreased, it is still significantly above typical monthly levels. “Despite declining volatility, investors continue allocating significant capital toward hedging downside risk,” VanEck wrote. Not only are total premiums at significant marks, but the put/call ratio—which compares the volumes of bets on Bitcoin going down to those of Bitcoin going up—jumped as high as 0.84 and averaged 0.77. VanEck says these marks are the highest since 2021, and indicate “unusually strong demand for downside hedging relative to bullish positioning.”

But relief might be hiding in the data for Bitcoin bulls. “When options markets have been this fearful in the past, Bitcoin has tended to recover,” the report reads. “The current level of defensiveness, while warranted by recent price action, has historically marked periods closer to market bottoms than tops.” Furthermore, long-term holders parting ways with their BTC “appears to be slowing” as Bitcoin transfers among holders of at least 1 year and above fell month-over-month. The top crypto asset has dropped nearly 1% in the last 24 hours, but remains up more than 5% in the last month, recently changing hands at $69,891. At that level, it still sits nearly 45% off its all-time high mark of $126,080 set last October.

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