Bitcoin options traders cut downside hedges before late-July Fed decision

Bitcoin derivatives positioning showed a broader reduction in risk ahead of Wednesday’s Federal Reserve decision, adding futures-market deleveraging to an options backdrop that had already turned less defensive. Options traders had cut downside hedges, with the put-to-call open interest ratio falling to about 0.52 from 0.76 since late June, while short-dated contracts showed lighter demand for protection than 3- to 6-month tenors and implied volatility remained low across maturities. On July 28, four major exchanges recorded a combined $817 million decline in seven-day bitcoin open interest, led by Gate.io with a $391 million drop, followed by Bybit at $178 million, Binance at $149 million and OKX at $99 million, indicating traders reduced leveraged exposure across venues rather than on a single platform. Binance also showed improving active order flow, with bitcoin cumulative net taker volume recovering to about -$1.7 billion from roughly -$3.2 billion at the start of July. Although that measure remained negative, the $1.5 billion recovery suggested aggressive selling pressure had eased and that pullbacks were increasingly met by taker buying. The mix of lower open interest, lighter options hedging and recovering cumulative volume delta points to a market paring leverage ahead of a major macro event without a matching acceleration in sell-side pressure.