With the annual Jackson Hole Symposium on the horizon, the cryptocurrency market is on edge, anticipating remarks from Federal Reserve Chairman Jerome Powell that could signal future monetary policy shifts. Bitcoin, the flagship cryptocurrency, is showing signs of a potential bearish turn, as key market indicators suggest traders are bracing for a downturn.
Options Market Signals
The options market has been a hotbed of activity, with the 180-day call-put skew on Deribit—a leading crypto options exchange—flipping to a negative 0.42. This level, the lowest since June 2023, indicates increased demand for put options. Essentially, traders seem to be hedging against potential price drops in Bitcoin, signaling a growing market caution.
Imran Lakha, founder of Options Insights, observed this shift as potentially marking a change in the market regime. “BTC longer dated skew flipping into put premium could be a sign of regime shift,” Lakha shared on X, suggesting that the market’s longstanding bullish bias might be giving way to a more cautious outlook.
Despite Bitcoin’s recent highs of over $124,000, a modest 8% price pullback has spurred this newfound demand for protective puts. “BTC and ETH skews are pulling toward put premium as markets correct,” Lakha noted in a blog post, highlighting the ongoing sale of calls and call spreads as traders reduce risk ahead of Powell’s anticipated speech. As explored in our recent coverage of market volatility, traders across various sectors are preparing for potential impacts from Powell’s address.
Macro Sentiments and Expectations
Amidst this market turbulence, expectations are swirling around Powell’s upcoming remarks. Nicolai Sondergaard, a research analyst at Nansen, suggests the market anticipates a dovish stance from the Fed, with potential rate cuts as early as September. However, Sondergaard cautions that if Powell merely delivers what’s expected, the market might experience a “sell the news” effect, leading to sideways or slightly bearish movements.
Conversely, a more aggressive rate-cutting signal from the Fed could reignite risk appetite, potentially setting off the next bullish leg in crypto. As Sondergaard put it, “If the Fed signals a deeper or faster cutting cycle than expected, that could spark fresh risk appetite.”
Wall Street Echoes
This cautious sentiment isn’t confined to the crypto sphere. On Wall Street, traders are similarly hedging their bets, with a surge in ‘disaster’ put options on the Invesco QQQ Trust Series 1 ETF, which tracks the tech-heavy Nasdaq 100 Index. Jeff Jacobson, head of derivative strategy at 22V Research Group, noted this trend, echoing the growing demand for downside protection.
Technical Indicators
The technical landscape paints a similarly cautionary picture. The Guppy multiple moving average (GMMA) indicator, developed by Australian trader Daryl Guppy, has signaled a potential bearish turn. Bitcoin’s price has dipped below the Guppy moving average bands, suggesting that bulls might be losing their grip. This indicator, along with others like the MACD histogram, points to strengthening downside momentum—a potential harbinger of further price weakness.
Looking Ahead
As the countdown to Powell’s speech continues, the crypto market finds itself at a crossroads. The interplay between macroeconomic signals and technical indicators raises questions about whether this bearish sentiment will persist or if a fresh catalyst could breathe new life into the market. Traders, analysts, and enthusiasts alike will be watching closely, as the outcomes from Jackson Hole could set the tone for the remainder of 2025. For a broader perspective on market sentiment, see our analysis of volatility trends.
Source
This article is based on: Key Bitcoin Indicators Hint at Major Bearish Shift in Sentiment as Jackson Hole Nears
Further Reading
Deepen your understanding with these related articles:
- Crypto Bleeds Ahead of Powell’s Jackson Hole Speech — Eight Reasons Why Traders Are Nervous
- Crypto Traders Eye Jackson Hole as Ether, XRP, Solana Drop Sharply in Retreat
- Bitcoin Drops Below $114K, Ether Loses $4.2K as Jackson Hole Speech Might Bring Hawkish Surprise
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
