Crypto traders are preparing for potential price declines in Bitcoin (BTC) and Ethereum (ETH) this August, with options data from Derive.xyz showing a clear tilt toward bearish positioning.
Bitcoin bearish sentiment
According to data shared with Crypto Finders/em>, open interest in Bitcoin put options with an Aug. 29 expiry date is nearly five times higher than call options.
Investors typically buy call options when they expect the asset’s price to increase. Conversely, they buy put options when they anticipate a decline in the asset’s value.
Notably, about 50% of that Derive’s put activity is concentrated around the $95,000 strike, while another 25% is split between $80,000 and $100,000.
Further confirmation comes from data from Deribit, a leading centralized derivatives exchange, where put options at the $110,000 and $95,000 strike prices account for over $2.8 billion in open interest.
This suggests traders are increasingly betting on a move below the six-figure mark.
Moreover, options skew, a measure comparing the cost of puts to calls, has shifted from +2% to -2% in the past month, reflecting a growing appetite for downside protection.
This shift in sentiment aligns with probability models that place an 18% chance on BTC revisiting $100,000 before the end of the month.
Ethereum volatility rises
Ethereum is also experiencing an increase in bearish sentiment, though to a lesser degree than Bitcoin.
Derive data shows that for the Aug. 29 expiry, put options outnumber calls by just over 10%.
The highest concentration of put activity is around the $3,200, $3,000, and $2,200 strike levels, suggesting traders are bracing for anything from mild declines to more significant drops in Ethereum’s price.
Moreover, ETH’s 30-day skew has dropped from +6% to -2%, suggesting a similar pattern of growing interest in downside protection.
Meanwhile, Ethereum’s monthly volatility remains higher, with an expected volatility of 65%, compared to Bitcoin’s 35%. This suggests Ethereum could experience a bumpier ride than Bitcoin in the weeks ahead.
Considering this, crypto traders on Derive have placed a 25% chance of ETH falling below $3,000 this month. However, with recent price rebounds, the odds of a close above $4,000 have doubled to 30% over the past week.
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