As summer approaches, seasoned traders in Bitcoin (BTC) and Ether (ETH) are bracing for potential market turbulence, dialing up protective strategies even as broader sentiment remains largely upbeat.
Market data from crypto derivatives exchange Deribit reveals that traders are increasingly relying on the 25-delta risk reversal strategy—a key options indicator showing whether the market leans bullish or bearish. The gauge currently signals caution, with negative readings for BTC and ETH across June, July, and August, reflecting a clear tilt toward downside protection through put options.
For Ether specifically, puts have grown significantly more expensive through late July, underscoring the market’s defensive posture. Such positioning suggests traders are hedging their spot and futures exposure in anticipation of possible volatility ahead.
“Risk reversals in both BTC and ETH remain firmly skewed toward downside protection into the summer months. This indicates that long holders are actively hedging and preparing for potential corrections,” wrote QCP Capital in a market note from Singapore.
The cautious stance is echoed in over-the-counter markets. On trading platform Paradigm, several large BTC trades last week included a put spread and a bearish risk reversal. In the ETH market, traders initiated positions in the $2,450 puts while engaging in short strangles, a strategy focused on profiting from volatility regardless of direction.
Despite these defensive plays, Bitcoin has spent over 40 days trading above $100,000, according to CoinDesk data. Analysts suggest that selling by miners and profit-taking by long-term holders has kept BTC stuck in a range, offsetting bullish momentum from robust spot ETF inflows.
“Bitcoin’s sideways movement suggests its current price might be too high for many retail participants. BTC options open interest has increased, and the rising 25-delta put-call skew on 30-day contracts signals stronger demand for short-term protective puts,” observed Coinbase Institutional in its weekly analysis.
Adding to the cautious mood, Bitcoin closed under its 50-day simple moving average (SMA) on Friday for the first time since mid-April, a technical signal that could trigger further selling and a possible dip below the crucial $100,000 level.
However, not all market observers are convinced that a major downturn is imminent. Analyst Cas Abbé points to strong on-balance volume readings for Bitcoin, suggesting solid underlying buying interest remains intact. Abbé projects BTC could climb to $130,000–$135,000 by the end of the third quarter.
