Ethereum's price has jumped 10% between Monday and Tuesday, hitting a notable peak not seen in over 15 weeks. Despite this impressive rally in May, which saw Ether surge by 49%, the digital asset has faced challenges breaking through the $2,800 resistance level in recent weeks, leading to an increase in bearish options strategies among traders.
Open interest in ETH options rose from $6.3 billion to $8.3 billion from early April to June 9, illustrating heightened institutional activity. The majority of this trading occurs on Deribit, which holds a 72% market share of ETH options. One of the main strategies traders employed recently is the short risk reversal, allowing them to profit from bearish price movements while collecting a net premium upfront. Another prevalent strategy is the bear diagonal spread, targeting short-term bearish sentiment by selling near-term call options and buying longer-dated calls.
Despite the bearish outlook from these strategies, many traders remain optimistic about the upcoming June 27 monthly options expiry. With 63% of total open interest being call options, bullish sentiment persists, particularly since 92% of the put options are set below the $2,700 mark—the levels at which these options would expire worthless if Ether maintains its price above this threshold.
Concerns linger, however, as other cryptocurrencies like Solana and XRP gain market momentum, prompting worries about Ether's competitive position. Additionally, news related to Bitcoin, such as recent announcements about new treasury developments from Trump Media and Technology Group, can also impact market perceptions. Ultimately, the need for downside protection does not necessarily predict an imminent price drop; instead, the overall positioning suggests a cautious but potentially supportive backdrop for ETH's price.
Open interest in ETH options rose from $6.3 billion to $8.3 billion from early April to June 9, illustrating heightened institutional activity. The majority of this trading occurs on Deribit, which holds a 72% market share of ETH options. One of the main strategies traders employed recently is the short risk reversal, allowing them to profit from bearish price movements while collecting a net premium upfront. Another prevalent strategy is the bear diagonal spread, targeting short-term bearish sentiment by selling near-term call options and buying longer-dated calls.
Despite the bearish outlook from these strategies, many traders remain optimistic about the upcoming June 27 monthly options expiry. With 63% of total open interest being call options, bullish sentiment persists, particularly since 92% of the put options are set below the $2,700 mark—the levels at which these options would expire worthless if Ether maintains its price above this threshold.
Concerns linger, however, as other cryptocurrencies like Solana and XRP gain market momentum, prompting worries about Ether's competitive position. Additionally, news related to Bitcoin, such as recent announcements about new treasury developments from Trump Media and Technology Group, can also impact market perceptions. Ultimately, the need for downside protection does not necessarily predict an imminent price drop; instead, the overall positioning suggests a cautious but potentially supportive backdrop for ETH's price.
