Ether (ETH) is now showing stronger signs of bearish sentiment in the derivatives market, as short-term options pricing reveals that traders are more concerned about downside risk for ETH than for Bitcoin (BTC).
Ether’s Downside Risk Now Costs More to Hedge
According to recent data, put options on ETH are trading at a 2% to 7% premium over call options, especially for contracts expiring in August and September. This pattern, known as a negative 25-delta risk reversal, indicates that traders are increasingly paying more to protect against potential price drops in ETH.
“Options traders now see Ether as riskier than Bitcoin in the near term.”
Bitcoin’s Options Market Shows More Balanced Sentiment
While Ether shows a rising bearish skew, Bitcoin’s short-term options market remains relatively stable. BTC puts are only trading at a 1% to 2.5% premium over calls, suggesting that investors still maintain relatively stronger confidence in Bitcoin’s price stability.
This contrast marks a shift from recent weeks, where institutional flows and whale activity appeared to favor Ether during bullish rallies across altcoins.
Why Traders Are Turning Cautious on ETH
The rising cost of ETH downside protection may be linked to:
Profit-taking after Ether’s 49% July rally
Market uncertainty surrounding future ETH staking yields and regulation
Concerns over Ethereum’s ability to retain momentum vs. Layer 2 alternatives
“The risk premium on ETH puts indicates concern that Ethereum may underperform Bitcoin in the short term,” analysts noted.
What Options Pricing Reveals About Market Sentiment
In options trading, a higher premium for puts over calls implies bearish bias. A put option gives the right to sell at a certain price, often used as a hedge. A call option, on the other hand, is used when investors expect the asset to rise.
As ETH’s put premiums widen, it reflects that traders expect potential short-term weakness — or are at least hedging more aggressively than they are with BTC.
Will Ether Regain Trader Confidence?
While short-term sentiment may be tilting bearish, the broader trend could shift quickly if ETH breaks above key resistance levels or if Ethereum-based ecosystem growth accelerates.
For now, however, the options market is clearly pricing higher risk into ETH than BTC, signaling that traders are approaching Ether with increased caution heading into late Q3 2025.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.
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