Ethereum News Today: Bitcoin and Ethereum Put Options Surge as Downside Protection Demand Rises

Investor demand for put options on Bitcoin and Ethereum expiring on August 29 has surged, reflecting heightened caution in the digital asset markets as traders seek to hedge against potential price declines [1]. Derive.xyz reported increased activity in these contracts, with the open interest for Bitcoin puts nearly five times that of calls. Over half of the Bitcoin put contracts are concentrated at the $95,000 strike price, with additional activity near $80,000 and $100,000 strike levels [1].

Ethereum also saw a similar trend, with put option volumes for the same expiry exceeding call options by more than 10%. The most active strike prices for Ethereum were $3,200, $3,000, and $2,200 [1]. Analyst Sean Dawson noted that the structure of these options suggests pessimistic expectations ranging from moderate corrections to more pronounced declines [1]. Ethereum, trading around $3,600 at the time of writing, had dropped 2.4% over the previous seven days, according to CoinGecko [1].

The negative asymmetry in options pricing—where put options are more expensive than calls—has become more pronounced in both assets, signaling a growing appetite for downside protection. The 30-day skew for Bitcoin has shifted from +2% to -2% in a month, while Ethereum's moved from +6% to -2% [1]. This shift indicates a more bearish sentiment among investors. The expected monthly volatility for Bitcoin stands at 35%, while Ethereum is anticipated to experience volatility of up to 65% [1].

Despite the bearish bias, Derive’s data also shows mixed expectations. The probability of Ethereum falling below $3,000 by the end of August is estimated at 25%, while the chance of the asset rising above $4,000 has increased from 15% to 30% [1]. For Bitcoin, Dawson forecasts an 18% probability of the price retesting the $100,000 level before month’s end [1].

The rise in protective options activity follows broader economic uncertainty, particularly after the July Federal Reserve meeting, where interest rates were held steady amid persistent inflationary pressures. This environment has prompted both retail and institutional investors to adopt hedging strategies, driving increased trading in crypto derivatives markets [1]. The behavior underscores a growing sophistication in risk management among market participants, as digital assets continue to integrate into mainstream portfolios.

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[1] https://coinmarketcap.com/community/articles/6893786c97a6d14cbbcf5856/