In-depth Glassnode Analysis: How Market Volatility Revealed Traders' True Intentions for BTC

Glassnode analysts have presented a unique perspective on the Bitcoin market through the lens of options. The study of volatility and trader behavior revealed that the positive dynamics of BTC in January conceal a much more complex picture — short-term optimism masks strategic concerns over longer horizons. Data from this analysis help better understand why the initial growth did not lead to a sustainable trend reversal.

In mid-January, Bitcoin demonstrated an impressive rise of about 8% over a few days. Based on options market indicators, this appeared as a sharp shift in sentiment — short-term speculators began to believe more actively in a continued rally. However, a detailed analysis by Glassnode uncovers a paradox: against the backdrop of local optimism, the market continued preparing to defend against price declines over longer timeframes.

Weekly options asymmetry: the illusion of sentiment change

The key indicator Skew 25D for weekly contracts (1W) made a sharp turn toward the neutral zone. Demand for downside protection instruments (puts) plummeted, while interest in bullish scenarios (calls) increased significantly. At first glance, this looks like confirmation of changing market expectations. However, an important nuance is often overlooked: active demand for near-term calls does not always reflect deep confidence in a reversal. Often, it’s just a wave of speculative interest that quickly passes without affecting the long-term trend. Volatility in this segment grew precisely because short-term players saw an opportunity for quick profit.

Put/Call ratio: quantity versus quality

The Put/Call Ratio fell from 1 to 0.4 — indicating that calls were traded much more actively. On the surface, this appears as a decisive bullish signal. However, the meaning of this indicator is not only in the fact that calls were bought but also that this was primarily short-term trading. Other data from the Glassnode analysis confirm: this demand was limited in time and did not reflect a reassessment of risks on a long-term level. Traders bet on growth for days, but their tactics sharply differed from strategic market reassessment.

Monthly options: the market remains cautious

When Glassnode analysts looked at monthly options (1M), the picture immediately changed. The asymmetry here decreased only from 7% to 4% at the minimum, while the weekly Skew fell from 8% to 1%. Volatility on the monthly horizon maintained a clear tilt toward puts, meaning the market continued to price in significant downside risks. Despite the current price increase of BTC, professional participants did not revise their scenarios. And as subsequent dynamics showed, they were right to be cautious. Traders bought protection against declines precisely when the price was rising — a classic hedging strategy ahead of a potential correction.

Three-month options: long-term pessimism

On the three-month horizon (3M), the shift was minimal — less than 1.5%. The main volatility skew remained tilted toward puts, indicating that the long-term protection strategy against declines persisted. This is the most important signal: despite positive movements at the end of November and January, the investment community was not rushing to revise long-term forecasts. Growth was seen as a tactical opportunity, not a signal of a transition into a new bullish trend.

Volatility behavior: selling rather than increasing confidence

Glassnode’s analysis shows another critical point: when Bitcoin’s price was rising, volatility instead decreased. In technical terms — implied ATM (at-the-money) volatility declined as the price moved upward. This is opposite to what happens during genuine impulsive moves. The normal scenario is that a price increase is accompanied by a spike in volatility and rising fears/emotions. Here, market participants used the price rise to sell volatility, earning from the market calm. Such behavior is typical for position unwinding and speculative maneuvers, not for confident breakthroughs.

Final verdict: a game of “maybe”

The analysis of all volatility indicators, options data, and market participant behavior reveals the true state of affairs. The demand for growth was present, but it was entirely concentrated in short-term options — tools used by speculators, not investors. On monthly and quarterly horizons, the market continued to price in significant downside risks. Volatility was sold during upward movements, not accumulated as it typically happens during sustainable breakouts.

The market played a “maybe, a reversal might start now” game, but the insurance policies against declines were never thrown out. And as subsequent dynamics showed, such caution was justified. Market volatility during this period fully reflected the duality of sentiment: short-term optimism coexisted with long-term concerns, creating a situation where the true intentions of professionals were protected over longer terms even amid obvious short-term optimism.