Gate Research: Options Market Sees Low Volatility Build-Up, Capital Positions Tilt Toward Bullish Spread Structures

Market Overview

In 2025, Bitcoin followed a typical cycle of “high-level launch → breakout to new highs → range-bound pullback.” In the first half of the year, spot ETF inflows pushed BTC above $120,000 at its peak. Subsequently, amid macro uncertainty and profit-taking, prices repeatedly retraced to the $70,000–$80,000 range. Toward year-end, BTC consolidated around $80,000–$90,000, with volatility compressing significantly—marking a post-peak digestion phase following the bull-market high.

Looking ahead to early 2026, with marginal improvements in macro liquidity and implied volatility (IV) at relatively low levels, the market may enter a high-level consolidation and accumulation phase. Should trading volume and realized volatility rebound in tandem, BTC and ETH could see a phase-wise upside breakout.

Options Market Dynamics

Latest data show BTC IV has declined to 43%, while ETH IV has fallen to 60%. Notably, ETH IV is now at an extremely low historical percentile of 1.4%, indicating a pronounced compression in the market’s pricing of short-term volatility.

From the BTC 25-delta skew over the past week, skews across maturities have generally fluctuated upward, with negative skews narrowing, reflecting a moderation in downside risk pricing. Medium- to long-term skews (30D–180D) remain relatively stable and slightly negative, suggesting that medium- to long-term downside risk pricing is largely unchanged.

ETH skew remains negative overall but continues to converge. Short-dated put skews first steepened and then retreated, signaling cooling short-term hedging demand, while medium- to long-term skews show limited change.

Over the past week, BTC’s volatility risk premium (VRP) shifted from negative to positive: early in the week, realized volatility (RV) exceeded IV, resulting in a negative VRP; subsequently, RV fell rapidly while IV adjusted more slowly, turning VRP positive and slightly wider, bringing options pricing back to a neutral-to-cautious stance. ETH RV declined sharply while IV remained relatively stable, causing ETH VRP to rise significantly mid-week, briefly reaching +14 vol.

Block Trade Structures

In the BTC and ETH options markets this week, block trades were dominated by bullish call spread structures. Approximately $2.1 billion worth of BTC and ETH options are set to expire this Friday. The largest block trades were as follows:

BTC: Bought BTC-300126-100000-C, with total volume of approximately 3,225 BTC and a net premium outlay of about USD 3.05 million

ETH: Bought ETH-300126-3500-C and sold ETH-300126-3000-C, with total volume of approximately 5,000 ETH and a net premium income of about USD 0.72 million

Platform Update

Gate has exclusively launched a streamlined options trading tool — the Recurring Sales Strategy — designed to help users automatically and continuously sell options over a predefined cycle. Users can customize delta/strike execution, expiry settings (T+1 / T+2 / T+3), selling price methods, position size, and optional take-profit and stop-loss parameters. The strategy automatically opens positions daily at 09:00 (UTC) and seamlessly rolls into the next cycle upon expiry, enabling fully automated execution. The feature also provides clear risk metrics, margin estimates, and projected trade paths, helping users manage strategy execution more intuitively.

Recurring Sales Strategy documentation: https://www.gate.com/help/other/options/48493