In the ever-evolving world of cryptocurrency, the sentiment surrounding BlackRock’s Bitcoin ETF has taken a bearish turn, with market indicators suggesting caution among traders. For the past two months, BlackRock’s Nasdaq-listed spot bitcoin ETF, known as IBIT, has been flashing warning signs. A key metric, the one-year put-call skew, has remained in positive territory since July 25, indicating a consistent preference for protective puts over bullish calls. This trend highlights a sustained risk-averse outlook among investors, signaling potential challenges ahead for the ETF.
A Persistent Bearish Sentiment
The put-call skew is a crucial measure of market sentiment, and its current state suggests that traders are hedging their bets. Since July, IBIT’s put-call skew has comfortably stayed above zero, a clear indication of traders’ preference for protective puts. This cautious stance isn’t unprecedented. Earlier this year, from March 8 to April 21, a similar put bias emerged, coinciding with sharp declines in both the spot price and IBIT. Back then, the downturn was primarily attributed to the trade war-induced weakness on Wall Street.
For investors, this persistent bearish sentiment poses questions about the future trajectory of IBIT. While some may argue that this caution reflects a prudent approach in a volatile market, others see it as a sign of underlying weaknesses that could hinder the ETF’s performance.
Stalled Price Momentum
Since July, IBIT’s price trend has hit a roadblock. Despite several attempts, it has repeatedly failed to rise above the $70 mark. Most recently, the ETF formed a “lower high” at $66, indicating that the latest peak was lower than the previous high near $70. This pattern suggests weakening buying pressure and a potential shift in momentum towards sellers. The formation of lower highs is often seen as a precursor to a downtrend, signaling that the bears might be gaining the upper hand.
This stalled momentum has sparked debates among analysts. Some argue that the current price action reflects a natural consolidation phase after significant gains earlier in the year. Others, however, view it as a warning sign of potential trouble ahead, as the ETF struggles to maintain its upward trajectory.
Broader Market Implications
The bearish sentiment surrounding IBIT isn’t occurring in isolation. The broader cryptocurrency market has faced its own set of challenges, with liquidity trends and macroeconomic factors playing significant roles. Bitcoin, the flagship cryptocurrency, has experienced its share of volatility, with “buy the dip” calls becoming more frequent. Yet, despite these calls for optimism, liquidity trends suggest that Bitcoin could be drawn to the $107K level, presenting both opportunities and risks for traders.
For IBIT investors, these broader market dynamics are vital to consider. While the ETF provides exposure to Bitcoin’s potential upside, it also carries the inherent risks of the cryptocurrency market’s volatility. As such, traders need to weigh the potential rewards against the risks, particularly in light of the sustained bearish sentiment.
Balancing Perspectives
Despite the clear signals of caution, it’s essential to maintain a balanced perspective. The cryptocurrency market is notoriously unpredictable, and sentiment can shift rapidly. While the current indicators suggest a bearish outlook, it’s worth noting that market conditions could change, driven by shifts in investor sentiment, regulatory developments, or macroeconomic factors.
For those considering an investment in IBIT, understanding the current market sentiment is just one piece of the puzzle. It’s equally important to consider one’s risk tolerance, investment goals, and the broader economic landscape. While the current bearish sentiment may deter some, others might see it as an opportunity to enter the market at a potentially lower price point.
Looking Ahead
As we move forward, the trajectory of BlackRock’s Bitcoin ETF remains uncertain. The persistent bearish sentiment and stalled price momentum present challenges, but they also offer opportunities for astute investors. Whether the current caution will give way to renewed optimism or further decline is yet to be seen.
For now, traders and investors are advised to keep a close eye on market indicators and trends, staying informed about potential developments that could impact the ETF’s performance. As always in the world of cryptocurrency, the only certainty is change, and those who can adapt to shifting conditions will likely find the most success.
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.
