Savvy Bitcoin
BTC$103,568.73
and ether
ETH$2,422.06
Traders are bolstering their defenses as the broader market continues to foresee bullish price action over the summer.
This is a message from an option-based strategy called 25-Delta Risk Reversal, which includes simultaneous purchases of Put options and selling calls, and vice versa.
At the time of writing, the risk reversal based on Bitcoin and ether options registered on Delibit showed investors positioning for downside volatility over the summer.
According to data source Amberdata, the reversal of BTC’s June, July and August tenor’s 25-DELTA risk is negative, indicating a preference for put options that offers more flaw protection than calls and bullish bets. In the case of ETH, the put was directed to the expiration date at the end of July.
Traders usually buy put options to hedge long positions in the spot and in the futures market, protecting themselves from potential price drops.
“The reversal of risk in both BTC and ETH continues to show preference for downside protection across the tenors in June and September, suggesting that longer-term holders are actively hedging spot exposures and preparing for potential drawdowns.”
BTC: 25-delta risk reversal. (Delibit, Amberdata)
Tension is evident in the paradigm of commercially available liquidity platforms. In this paradigm, this week’s top five BTC trading includes put spreads and bearish risk reversal. On the other hand, in the case of ETH, the long position of the $2,450 put went over the tape with a short tension (volatility) transaction.
Bitcoin, the leading cryptocurrency by market value, has spent more than 40 days trading on more than $100,000, according to Coindesk data. Analysts say long-term holder profit acquisition and miner sales counteract the strong intake of Spot ETFs, with prices still moving forward.
“Bitcoin has been tracking sideways recently, suggesting that current prices could be too high for many retail investors. Open interest in BTC options has increased, distorting put calls for 25 deltas on a 30-day contract.
On Friday, BTC traded below the 50-day simple moving average (SMA) and below major support for the first time since mid-April. This breakdown could lead to more chart-driven sales, potentially dropping below $100,000.
However, some observers are hoping to gather at new record highs. According to Market Observer Cas Abbé, BTC’s balanced volume continues to show strong purchase pressure, suggesting that prices could rise from $130,000 to $135,000 by the end of the third quarter.