Bitcoin’s next selloff could be amplified by the traders still betting on its recovery

Bitcoin options traders are becoming more defensive even as leveraged futures traders maintain bullish exposure amid persistent spot selling.An Oct. 19 Glassnode report showed Bitcoin's 25-delta options skew climbing from 5.2% to 8.6% over the preceding week, reflecting a growing premium for downside protection relative to bullish options.Meanwhile, aggregate funding payments by perpetual futures longs jumped 49.4% to $1.6 million, suggesting continued demand for leveraged bullish exposure despite weak buying activity in the underlying market.The contrasting positions emerged as Bitcoin struggled to recover from October's selloff. The cryptocurrency traded near $81,300 at press time, more than 2% lower than the previous week.The divergence leaves Bitcoin exposed to renewed volatility if spot selling persists and leveraged traders are forced to reduce positions, particularly as investors prepare for another Federal Reserve interest-rate decision later this month.Bitcoin options signal growing caution despite subdued price swingsGlassnode's options data show investors are placing greater value on protection against further losses even as Bitcoin's recent price movements have become r...