Cryptocurrency investors are bracing themselves for potential dips in the values of
Bitcoin (BTC) and
Ethereum (ETH) throughout August. Data from Derive.xyz indicates a growing preference for bearish strategies among traders.
Bitcoin Bearish Sentiment
Analysis reveals a significant skew towards put options for Bitcoin, set to expire on August 29th. Open interest in these put options is almost five times greater than call options, according to data shared with CryptoSlate.
Generally, investors opt for call options when they anticipate a rise in an asset’s price. Conversely, put options are favored when a price decrease is expected.
Specifically, around half of the put option activity observed on Derive is concentrated around the $95,000 strike price. An additional 25% is distributed between the $80,000 and $100,000 levels.
Further reinforcing this view is information sourced from
Deribit, a prominent centralized exchange for derivatives. Put options at the $110,000 and $95,000 strike prices collectively represent over $2.8 billion in open interest.
This trend suggests a rising number of traders are anticipating a decline below the $100,000 threshold for Bitcoin.
Furthermore, the options skew, which measures the relative cost of puts versus calls, has changed from +2% to -2% over the last month. This reflects an increasing demand for protection against potential losses.
This shift in sentiment aligns with probability models that currently estimate an 18% likelihood of Bitcoin returning to the $100,000 mark before August concludes.
Ethereum Volatility Rises
Ethereum is also seeing a growth in pessimistic outlooks, although not as pronounced as with Bitcoin.
Data from Derive indicates that for options expiring on August 29th, put options exceed call options by slightly more than 10%.
The most concentrated put activity is centered around strike prices of $3,200, $3,000, and $2,200. This suggests that traders are preparing for a range of potential outcomes, from modest price reductions to more substantial declines in Ethereum’s value.
Additionally, Ethereum’s 30-day skew has fallen from +6% to -2%, mirroring the pattern seen with Bitcoin and highlighting a growing interest in downside protection.
Meanwhile, Ethereum’s implied monthly volatility remains elevated at 65%, compared to Bitcoin’s 35%. This implies that Ethereum may experience a more turbulent period than Bitcoin in the coming weeks.
Given these factors, crypto traders on Derive estimate a 25% probability of Ethereum dropping below $3,000 this month. However, following recent price recoveries, the chances of the price
closing above $4,000 have doubled to 30% within the past week.