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| Bearish Sentiment Rises: Crypto Traders Brace as Bitcoin and Ethereum Put Options Surge |
As of August 6, 2025, the cryptocurrency market is showing fresh signs of caution. Traders are increasingly betting against Bitcoin (BTC) and Ethereum (ETH), according to new data from derivatives analytics platform Derive.xyz. This rise in put options—financial instruments that gain value when asset prices fall—indicates a growing unease about the sustainability of recent gains.
Bitcoin Bearish Bets Outpace Bullish 5-to-1
Roman Storm, Head of Research at Derive, reported that bearish bets on Bitcoin have now outnumbered bullish contracts by nearly five to one for positions expiring at the end of August. Notably, the most popular strike prices are set at $80,000, $95,000, and $100,000—implying widespread belief that BTC may once again retreat from the six-figure threshold before month-end.
Bitcoin’s price is currently down approximately 3% for the week, trading at $114,075, signaling market uncertainty following weeks of steady gains.
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Ethereum: Premium on Puts Signals Rising Fear
Ethereum is facing similar headwinds. Derive's data shows that put options not only dominate the volume, but are trading at a 10% premium over call options—meaning traders are paying more for downside protection.
The most heavily traded ETH puts are around $3,200, $3,000, and $2,200, suggesting traders anticipate potential sharp corrections. ETH has dropped over 4% this week, sitting at $3,624 at press time.
Market Indicators Point to Volatility
Two critical indicators further reflect the shift in sentiment:
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Option Skew: This measures demand for calls vs. puts. Bitcoin’s skew has moved from +2 to -2, and Ethereum’s from +6 to -2, signaling a sharp rise in bearish hedging.
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Implied Volatility (IV): Ethereum’s monthly IV has surged to 65%, while Bitcoin’s stands at 35%, widening the volatility spread between ETH and BTC to 30 points, up from 24 in early June.
What is Implied Volatility? — Understand why it matters for crypto options.
Is There Still Hope?
Despite the rise in bearish bets, the crypto market hasn't given up on bullish possibilities:
- Ethereum still holds a 30% probability of crossing $4,000 by late August—double the chance from just a week ago.
- Bitcoin retains an 18% chance of hitting $100,000 in the same timeframe.
- Meanwhile, the likelihood of ETH falling below $3,000 stands at 25%.
Final Thoughts
While the surge in put option trading reflects growing caution among investors, it doesn’t necessarily signal the end of the bull cycle. The derivatives market suggests a volatile August ahead for crypto traders, with both risk and opportunity on the table.
For investors, this is a crucial time to monitor market sentiment, reassess risk exposure, and consider diversified strategies, especially with volatility on the rise.
