Crypto Options Show Bearish Bias for Bitcoin and Ether, While Solana Shows Resilience
Options data tied to Bitcoin (BTC) and Ether (ETH) are indicating a preference for put options, reflecting cautious sentiment among traders. According to QCP Capital, short-term puts—bearish bets—are dominating in both Bitcoin and Ether markets as concerns over downside risks persist. This caution comes as the Federal Reserve is expected to cut interest rates soon, adding further uncertainty to the market.
Prices for Bitcoin and Ether have seen a nearly 10% recovery from last week’s lows, fueled by optimistic signals from order book metrics and the anticipated Federal Reserve rate cut next week. However, despite these gains, options-based risk reversals show that traders are still leaning toward bearish positions, particularly in the short term.
A risk reversal measures the relative demand for call and put options. A positive risk reversal suggests that call options, which benefit from price rallies, are more expensive than puts, indicating bullish sentiment. A negative risk reversal, on the other hand, suggests a higher demand for put options, reflecting bearish sentiment. According to QCP Capital, the options market on Deribit is currently skewed toward puts, highlighting ongoing concerns about downside risks.
“Given the sharp drop last week, the market remains cautious about further downside risk,” QCP’s market insights team noted in a Telegram broadcast. “Risk reversals until October continue to lean toward puts for both BTC and ETH.”
This shift to put options was particularly evident after a weak U.S. nonfarm payrolls (NFP) report reignited recession fears, pushing traders to hedge against further declines. Tony Stewart from Deribit Insights reported that traders were purchasing short-term put options in anticipation of Bitcoin dropping to levels as low as $50,000 or even $40,000. At the time of writing, Bitcoin is trading around $57,000, according to CoinDesk data.
The cautious outlook is partly driven by historical data, which suggests that economic downturns and risk aversion often follow the start of a Fed rate-cutting cycle. The Federal Reserve is widely expected to reduce interest rates by 25 basis points next week, adding to the sense of uncertainty in the market.
Alex Kuptsikevich, a senior analyst at FxPro, also expressed skepticism about the sustainability of recent price rallies. “We believe caution and a tendency to sell into growth will dominate the market, at least until the U.S. inflation data is released on Wednesday, and likely through the Fed’s interest rate decision on September 18th,” Kuptsikevich said.
Solana (SOL) Seen as More Resilient
Despite the bearish sentiment surrounding Bitcoin and Ether, Solana (SOL) is standing out as a more resilient asset. Options data shows that SOL is likely to outperform Ether in the near term, as traders display a greater appetite for upside potential in Solana compared to Ethereum.
According to Amberdata, Solana’s one-month options skew—measuring the demand for calls relative to puts—has moved above zero, signaling increased interest in calls. Meanwhile, Ether’s one-month skew remains around -2%, indicating a bias toward puts.
“Traders are positioning to protect downside risk in Ethereum, while showing optimism for Solana’s upside potential,” noted Kristian Haralampiev, structured products lead at Nexo. He also pointed out that Ethereum’s volatility index remains higher than Bitcoin’s, suggesting more price turbulence ahead for ETH.
As the crypto market navigates through these uncertain times, Bitcoin and Ether traders are bracing for potential short-term weakness, while Solana emerges as a relatively stronger contender.
