Crypto traders are bracing themselves for potential price declines in Bitcoin (BTC) and Ethereum (ETH) this August, as options data from Derive.xyz suggests a clear bearish sentiment in the market.
Bitcoin, the leading cryptocurrency, is seeing a significant tilt towards bearish positioning. Data shared with CryptoSlate reveals that open interest in Bitcoin put options with an Aug. 29 expiry date is nearly five times higher than call options. This indicates that investors are preparing for a potential decline in Bitcoin’s value. The majority of put activity is centered around the $95,000 strike, with additional interest at $80,000 and $100,000 strike prices. Deribit, a centralized derivatives exchange, also confirms this bearish sentiment, with put options at $110,000 and $95,000 strike prices accounting for over $2.8 billion in open interest.
Further supporting the bearish outlook, options skew has shifted from +2% to -2% in the past month, indicating a growing interest in downside protection. Probability models suggest an 18% chance of Bitcoin revisiting $100,000 before the end of the month, aligning with the prevailing sentiment in the market.
On the other hand, Ethereum is also experiencing an increase in bearish sentiment, although to a lesser extent than Bitcoin. Put options outnumber calls by just over 10% for the Aug. 29 expiry, with the highest concentration of put activity around the $3,200, $3,000, and $2,200 strike levels. This suggests that traders are preparing for potential declines in Ethereum’s price.
Ethereum’s 30-day skew has dropped from +6% to -2%, indicating a similar trend of growing interest in downside protection. Additionally, Ethereum’s monthly volatility remains higher than Bitcoin’s, with an expected volatility of 65% compared to Bitcoin’s 35%. This suggests that Ethereum could experience more significant price fluctuations in the coming weeks.
Despite the bearish sentiment, recent price rebounds have led to a shift in probabilities for Ethereum. Traders on Derive now place a 25% chance of ETH falling below $3,000 this month, while the odds of a close above $4,000 have doubled to 30% over the past week.
In conclusion, the options data from Derive.xyz paints a picture of cautious optimism among crypto traders, with a clear tilt towards bearish positioning in both Bitcoin and Ethereum. As the market continues to navigate potential price declines, traders are closely monitoring key levels and preparing for various scenarios to protect their positions.