In brief
- A $2 billion “call condor” options trade is betting on a Bitcoin rally to $118,000 by December 2025, but no higher.
- Analysts say a true market bottom isn’t here yet, citing still-elevated implied volatility and negative skew.
- They point to three key signals for a “genuine low,” including a drop in IV, a return to contango, and a neutral skew.
Options traders’ bets are flashing a complex signal for Bitcoin: expect a rally, but don’t bet on a moonshot. The trade highlights a market that has priced out a euphoric year-end surge in favor of a more measured, range-bound ascent.
Roughly 20,000 BTC in notional call condor block trades were spotted on Deribit, structured for the top crypto to settle between $100,000 and $118,000 by December 2025.
The strategy involves buying four call options with the same expiry but at different strike prices. It is typically employed when investors expect a rally but believe the upside is capped.
“The previously consensus view of a year-end ‘Santa rally’ has been priced out of the markets.” Jake Ostrovskis, an OTC trader at crypto market maker Wintermute, noted in a Tuesday tweet, referring to the recent uptick in long call condor block trades.
“For those looking to time a genuine low, the term structure will likely serve as the key signal,” Ostrovskis noted, highlighting, “implied volatility to drop off, contango to return to the term structure, and skew to drift back toward neutral.”
“Under the current market conditions, the expectations for a new high in the fourth quarter have completely dissipated, and a bearish sentiment has taken hold,” Adam Chu, chief researcher at options analytics firm GreeksLive, told Decrypt, echoing Ostrovskis’ tempered bullish year-end expectations.
The massive long call condor orders are likely part of “whale-driven repositioning” ahead of monthly expiries, Chu suggested.
However, the market has not yet met these bottoming conditions, Sean Dawson, head of research at on-chain options platform Derive, told Decrypt. He cited uptrending 30 and 180-day implied volatility despite prices stabilizing, meaning traders are still paying up for panic protection.
A spike in implied volatility, which measures market expectations of future price swings, means the market expects a larger price swing in an asset’s future price, signaling increased uncertainty or fear.
The current “backwardation” in the volatility term structure—where short-term volatility is more expensive than long-term—is a classic sign of distressed markets, Dawson explained. A return to “contango,” where long-dated IVs are higher, would signal that markets have settled.
The skew, meanwhile, has been deeply negative since the October 10 flash crash, Dawson said.
While there has been a slight recovery over the past week, “there’s quite some way to go before we see skew properly revert” to a neutral state, he added, indicating bearish sentiment has not yet fully dissipated.
The combination of those signals suggests professional traders are positioning for continued volatility and a lack of conviction in a straight-line recovery.
Despite recent declines in key metrics, “market panic has not fully subsided,” GreeksLive’s Chu said, adding that “the final month of the year remains risky, with volatility expectations still elevated.”
Dawson broadly agreed with the capped outlook, stating he expects Bitcoin to be range-bound between $100,000 and $118,000 for the rest of 2025, with a move above $120,000 more likely well into the new year.
Bitcoin is currently trading at $87,400, down 0.3% over 24 hours, according to CoinGecko data.
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