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Demand for Put Options Rises, Reflecting Market Risk Aversion
Increased Demand for Ethereum Put Options
More Apparent Bearish Sentiment in Bitcoin
Surge in Ethereum Implied Volatility
Price Expectations Still Divergent
According to data from the cryptocurrency derivatives platform Derive.xyz, options positions expiring on August 29 show a clear bearish tendency, with a significant increase in the demand for put options on both Bitcoin and Ethereum, indicating that traders are hedging against potential downward risks as the month comes to a close.
In the options market, a put option grants the holder the right to sell an asset at a specified price, which is typically favored when the market expects a price decline. When the demand for put options exceeds that for call options, it reflects an increased need for protection against downside risk.
Dr. Sean Dawson, head of research at Derive, stated in an interview that as of the expiration date of August 29, the number of Ethereum put options has surpassed call options by about 10%, with popular strike prices concentrated at 3,200, 3,000, and 2,200. Dawson pointed out that such positioning indicates market expectations for scenarios ranging from a “moderate pullback to a deep correction.” At the time of writing, the price of Ethereum was approximately $3,657.
In comparison, the market positioning for Bitcoin appears to be more pessimistic. Sean Dawson mentioned that the open interest in Bitcoin put options is nearly five times that of call options, with about half concentrated around the 95,000 strike price, along with a substantial number of positions distributed around the 80,000 and 100,000 dollar levels, indicating traders expect Bitcoin prices may “fall below $100,000.” At the time of writing, the price of Bitcoin was approximately $114,570.
Derive noted that in terms of 30-day implied volatility, Ethereum’s volatility has reached 65%, significantly higher than Bitcoin’s 35%. The volatility gap between the two has widened from 24 percentage points in early June to nearly 30 points, indicating that market uncertainty regarding Ethereum’s future trend continues to rise. Although the positioning in options does not show an extreme bearish ratio for Ethereum as it does for Bitcoin, this volatility structure still suggests that Ethereum could face more intense price fluctuations in August.
However, despite the substantial increase in put options in the options market, Derive’s price probability model exhibits a sentiment of “bearish but not entirely pessimistic.” Taking Ethereum as an example, the current model estimates that the probability of it dropping below 3,000 by the end of August is about 25%; at the same time, the probability of breaking above 4,000 has also risen to 30%, compared to 15% last week, indicating a notable upward revision. Bitcoin, on the other hand, remains relatively conservative, with a probability of returning to the 100,000 mark at about 18%. This probability distribution reflects that while there is an awareness of downside risks in the market, the possibility of a bullish rebound is not entirely ruled out, forming a market structure characterized by “potential high volatility but uncertain direction.”
