Crypto Traders is preparing for potential price drops for Bitcoin (BTC) and Ethereum (ETH) this August.
Bitcoin’s bearish sentiment
According to shared data Encryptionthe open interest in the Bitcoin Put option, which has an expiration date of August 29, is almost five times more than the call option.
Investors usually buy call options if the price of an asset is expected to rise. Conversely, when the value of the asset is expected to decrease, they buy put options.
In particular, about 50% of its derived put activity is concentrated on strikes of $95,000, while an additional 25% is split between $80,000 and $100,000.
Further confirmation comes from data from Deribit, the major centralized derivative exchange, where the options are recorded at strike prices of $110,000 and $95,000 with public profits of over $2.8 billion.
This suggests that traders are increasingly betting on moves below the six-figure mark.
Furthermore, optional skew, a measure of cost comparisons for calls, has shifted from +2% to -2% over the past month, reflecting an increase in desire for downside protection.
This shift in emotion is consistent with the probability model that places an 18% probability on BTC, revisiting $100,000 by the end of the month.
Ethereum volatility increases
Ethereum also experiences an increase in bearish feelings, albeit to a lesser extent than Bitcoin.
Derived data shows that the August 29th expiration date will exceed the option by just over 10%.
The highest concentration of PUT activity is a strike level of around $3,200, $3,000, and $2,200, strike level of around $3,200 and $2,200, suggesting that traders are encouraged by anything from mild declines to a larger drop in Ethereum prices.
Furthermore, 30-day skew for ETH has dropped from +6% to -2%, suggesting a similar pattern of growing interest in downside protection.
Meanwhile, Ethereum’s monthly volatility remains high, with the expected volatility of 65% compared to Bitcoin’s 35%. This suggests that Ethereum will experience a more shining ride than Bitcoin in the coming weeks.
With this in mind, Derive’s Crypto Traders has now reached a 25% chance of ETH falling below $3,000 this month. However, recent price rebounds have doubled the chance of over $4,000 to 30% in the past week.
