What Are Savvy Bitcoin and Ether Traders Preparing For as Summer Approaches?
Savvy Bitcoin (BTC) and Ether (ETH) traders are employing defensive strategies amid a market anticipating bullish summer price action. This is evident in the 25-delta risk reversal options strategy, which involves simultaneous put and call option trades, revealing investor sentiment.
Data from Amberdata shows negative 25-delta risk reversals for BTC across June, July, and August, indicating a preference for put options (downside protection) over call options (bullish bets). Similarly, ETH options show higher put prices extending to the July expiry. This put option buying suggests hedging of existing long positions in spot and futures markets, safeguarding against potential price drops.
QCP Capital notes a continued preference for downside protection in both BTC and ETH options, highlighting active hedging by long holders anticipating potential price declines. Over-the-counter trading on Paradigm further underscores this cautious sentiment. Top BTC trades included a put spread and a bearish risk reversal, while ETH trades showed a long $2,450 put position alongside a short strangle (volatility) trade.
Bitcoin’s price has remained range-bound above $100,000 for over 40 days, according to CoinDesk. Analysts attribute this sideways movement to profit-taking by long-term holders and miner selling, offsetting positive impacts from spot ETF interest. Coinbase Institutional’s report indicates Bitcoin’s price might be too high for many retail investors, with increased open interest in BTC options and a rising 25-delta put-call skew on 30-day contracts suggesting short-term protection seeking.
Friday’s close saw BTC trading below its 50-day simple moving average (SMA) for the first time since mid-April, potentially triggering further chart-driven selling and a drop below $100,000. However, some, like market observer Cas Abbé, remain bullish, citing strong buying pressure indicated by on-balance volume and predicting a price rise to $130,000-$135,000 by the end of Q3. The divergence in opinions highlights the uncertainty within the market, with traders employing diverse strategies to navigate the potential volatility.
