- Derive.xyz sees higher demand for Bitcoin and Ethereum put options expiring August 29.
- Put option spike signals investors are hedging against possible late-August market drops.
- BTC and ETH implied volatility diverges; Ethereum's swings could outpace Bitcoin's.
Investor demand for Bitcoin and Ethereum put options expiring on August 29 has surged, according to Derive.xyz, as traders look to hedge against potential price declines by month’s end.
A call option gives the right, but not the obligation, to buy an asset at a specified price before the contract expires. A put option gives the right, but not the obligation, to sell the asset under the same terms.
Increased demand for put options usually signals a desire to hedge against a decline in asset prices. This leads to negative asymmetry: puts are more expensive than calls, reflecting increased demand for protection against a market decline.
Bearish Bias
According to Derive, the volume of put options on Ether expiring on August 29 exceeded call options by more than 10%. The greatest activity was recorded at strike prices of $3,200, $3,000, and $2,200.
Analyst Sean Dawson believes that this structure indicates pessimistic expectations—from a moderate correction to a more pronounced decline.
At the time of writing, Ethereum is trading around $3,600. Over the past seven days, the asset’s price has fallen by 2.4%, according to CoinGecko.
The negative asymmetry is more pronounced in Bitcoin, Dawson noted. Open interest in put options expiring on August 29 is almost five times higher than for calls. Almost half of the contracts are concentrated at the $95,000 strike, with another quarter near the $80,000 and $100,000 levels.
“Investors are hedging en masse in case of a sharp pullback below $100,000,” the expert emphasized.
Over the past seven days, the leading cryptocurrency has fallen by 3.1%. At the time of writing, the asset is trading around $113,862, according to CoinGecko.
The skew between puts and calls is a sign of the popularity of hedging strategies. According to Derive, the 30-day indicator for Bitcoin has dropped from +2% to -2% in a month, while for Ethereum it has dropped from +6% to -2%.
The expected monthly volatility is around 35% for Bitcoin and 65% for Ethereum. The gap between the two has widened from 24% in early June to approximately 30% now. This points to a larger swing in Ethereum price in August, despite less bearish sentiment in the options structure.
Despite the interest in hedging, Derive data points to mixed investor expectations. The probability of Ethereum falling below $3,000 by the end of August is 25%. The chances of rising above $4,000 have increased from 15% to 30%.
Dawson estimates that the probability of Bitcoin retesting the $100,000 level before the end of the month is 18%.
According to the publication, investors have become somewhat more cautious since the July Fed meeting. The regulator expectedly kept the rate at the same level, noting the continuing inflation risks and economic uncertainty.
Market Perspective
Rising demand for protective options often follows broader economic uncertainty. After the July Federal Reserve meeting, where interest rates were held steady amid ongoing inflation concerns, many investors became notably more cautious.
Global macroeconomic signals—such as shifting monetary policy and persistent inflation—are prompting both retail and institutional traders to hedge crypto exposure, further driving activity in derivatives markets like Derive.xyz.
This highlights the growing sophistication and risk management focus among participants in today’s digital asset markets.
