As summer unfolds, the cryptocurrency markets are displaying subtle but significant shifts in trader sentiment—particularly among seasoned investors in Bitcoin (BTC) and Ether (ETH). While price action remains range-bound, the real story lies beneath the surface: in the options market, where sophisticated players are quietly positioning themselves for volatility, uncertainty, and potential downside.
Understanding Risk Reversals: A Signal from the Options Market
One of the most telling indicators of institutional and professional trader behavior is the 25-delta risk reversal—an options strategy that reveals market bias by comparing the demand for put options (bearish bets) versus call options (bullish bets).
Currently, risk reversals for both BTC and ETH on Deribit show a consistent pattern: negative values across June, July, and August expiries. This means traders are paying more for put options than calls, signaling a preference for downside protection.
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A negative risk reversal doesn’t necessarily mean traders expect a crash—it reflects caution. In this case, it suggests that long-term holders are actively hedging their spot and futures exposure, preparing for possible drawdowns even as broader sentiment remains cautiously optimistic.
Why Hedging Now?
Bitcoin has been trading in a tight range above $100,000 for over 40 days, according to CoinDesk data. Despite strong inflows into U.S.-listed spot Bitcoin ETFs, upward momentum has stalled. Analysts point to profit-taking by long-term holders and miner selling as key forces counterbalancing institutional demand.
This equilibrium has created a fragile market—one that could tip either way with a single catalyst.
Coinbase Institutional noted in its weekly report:
"Bitcoin has recently tracked sideways, suggesting its current price may be too high for many retail investors. Open interest in BTC options has risen, with a positive and rising 25 delta put-call skew on 30-day contracts, which may imply that market participants are seeking short-term protection through put options."
Ether Shows Similar Caution
Ether isn’t immune to this defensive posture. ETH’s 25-delta risk reversals also reflect elevated demand for puts, particularly out to July expiry. On over-the-counter (OTC) desks like Paradigm, recent large trades included a long position in the $2,450 put and a short strangle, indicating bets on limited upside and increased downside risk.
These moves suggest traders aren't just passively holding—they're actively managing risk in anticipation of potential turbulence during the summer months, traditionally a period of lower liquidity and higher volatility in financial markets.
Technical Signs Point to Vulnerability
From a technical perspective, Bitcoin recently broke below the 50-day simple moving average (SMA) for the first time since mid-April. Closing below this key moving average can trigger algorithmic and momentum-based selling, potentially accelerating declines if support at $100,000 fails.
While some analysts warn of a drop below that psychological level, others see long-term strength building beneath the surface.
Bullish Counter-Narrative: On-Balance Volume Hints at Hidden Demand
Market observer Cas Abbé highlights that BTC’s on-balance volume (OBV) continues to trend upward—an indicator of sustained buying pressure despite flat price action. This divergence suggests accumulation is underway, possibly setting the stage for a breakout later in Q3.
He projects:
"Prices could rise to $130,000–$135,000 by the end of the third quarter."
This scenario would require renewed ETF inflows, reduced selling pressure from miners and long-term holders, and improved macro conditions—such as easing inflation or rate cuts by central banks.
Key Themes Emerging This Summer
Several core dynamics are shaping trader behavior in 2025:
- Hedging against volatility: With geopolitical tensions, regulatory scrutiny, and macroeconomic uncertainty persisting, traders are prioritizing capital preservation.
- ETF-driven demand vs. on-chain supply pressure: Spot ETFs continue to absorb supply, but profit-taking from early investors remains a headwind.
- Seasonal liquidity patterns: Summer often brings thinner markets, increasing the risk of sharp moves on low volume.
These factors combine to create an environment where preparation trumps prediction—and where tools like options allow savvy investors to navigate uncertainty without exiting positions entirely.
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Frequently Asked Questions
Q: What does a negative 25-delta risk reversal mean?
A: It indicates stronger demand for put options over calls, reflecting a market preference for downside protection. It’s often seen when traders hedge long positions amid uncertainty.
Q: Are traders expecting Bitcoin to crash?
A: Not necessarily. The data shows caution rather than panic. Many are hedging against short-term pullbacks while maintaining long-term bullish outlooks.
Q: Why is open interest rising in BTC options?
A: Rising open interest suggests growing participation in derivatives markets. Combined with a rising put-call skew, it points to increased demand for protective strategies.
Q: Is Ether following the same pattern as Bitcoin?
A: Yes. ETH traders are also favoring puts, especially around key strike prices like $2,450, and engaging in volatility-selling strategies like short strangles.
Q: Can Bitcoin break to new highs this year?
A: Possible. Technical indicators like on-balance volume suggest underlying strength. A confluence of positive macro news and sustained ETF inflows could propel BTC toward $130,000+.
Q: How do seasonal trends affect crypto markets?
A: Summer months typically see lower trading volumes and reduced liquidity, which can amplify price swings. Traders often adjust strategies accordingly—favoring hedges and tighter risk controls.
The Bottom Line: Defense First, Then Opportunity
The current market environment reflects a tug-of-war between bullish fundamentals and bearish technicals. On one side: strong ETF demand and hidden accumulation. On the other: resistance at $100K+, technical breakdowns, and elevated hedging activity.
For now, BTC and ETH traders are preparing for volatility—not betting on it. They’re using options not to speculate wildly, but to protect gains, manage exposure, and stay positioned for what comes next.
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Whether summer brings consolidation or a breakout, one thing is clear: the most successful investors aren’t just watching price—they’re watching risk, liquidity, and market structure.
By focusing on these deeper metrics, they remain ready—no matter what the market decides to do next.