The excitement that powered crypto markets higher last month appears to be fading, with new data showing traders are positioning for a potential reversal in August.
Fresh analysis from derivatives platform Derive.xyz indicates a sharp uptick in bearish activity, particularly through options trading. A significant number of market participants are stacking up on Bitcoin and Ethereum put options—contracts that profit if prices fall—suggesting growing concern over the staying power of recent gains.
Roman Storm, Head of Research at Derive, noted that Bitcoin’s bearish bets outweigh bullish ones by nearly five to one for contracts expiring at the end of August. Strikes around $80K, $95K, and $100K are seeing the most action, pointing to expectations that BTC could dip below six figures again before the month ends.
Ethereum is also flashing caution. Put options not only dominate in volume, but they’re also trading at a 10% premium over calls—indicating demand for protection is rising. Popular levels for ETH puts are hovering around $3,200, $3,000, and even as low as $2,200.
At the time of writing on August 6, Bitcoin is down around 3% on the week to $114,075, while Ethereum has slipped more than 4% to roughly $3,624.
The broader derivatives market is showing signs of stress. One of the key indicators, option skew—which reflects the cost of downside insurance—has flipped sharply negative for both assets. Bitcoin’s skew dropped from +2 to -2, and Ethereum’s from +6 to -2 in just a few weeks.
Implied volatility is also surging, especially for Ethereum. ETH’s monthly IV has ballooned to 65%, compared to Bitcoin’s 35%, widening the volatility spread between the two assets to 30 points—up from 24 at the start of June.
Despite all the protective positioning, Derive’s models suggest the market hasn’t lost hope entirely. Ethereum still holds a 30% shot of breaking above $4,000 before the month is out—double the odds from just a week ago—while the probability of falling below $3,000 sits at 25%. For Bitcoin, there’s still an 18% chance it tests $100,000 again by late August.
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Source: https://coindoo.com/crypto-traders-grow-cautious-as-bets-against-bitcoin-and-ethereum-surge/