Key Takeaways:
- Traders employ ETH options for hedging following Ether’s sustained 49% rally in May.
- Altcoin ETF potential listings pose threat to ETH’s market dominance and price.
Ether’s Struggling Breakout Amid Rising Bearish Options Demand
Ether (ETH) prices recently climbed 10%, breaching a 15-week high, yet persistently failed to surpass the $2,800 resistance level over the past month. As resistance solidified, protective derivative positions surged.
Ether options saw a significant flow spike, with open interest reported at $8.3 billion, a notable increase from $6.3 billion observed between early April and the preceding Monday, suggesting heightened institutional engagement. Deribit continues to dominate this market space, accounting for a substantial 72% exchange share.
Examining option flows, especially reversals and spreads, indicates professional traders are increasingly prioritizing downside protection.
Deribit Dominance in ETH Options Trading
Data analysis points to the “short risk reversal” (selling calls while buying puts) as particularly prevalent, embodying a bearish strategy that simultaneously profited from potentialETH declines and collected premiums. Another favored tactic is the bear diagonal spread, where near-term calls are sold while longer-dated ones at higher strikes are purchased, expediting gains via time decay while factoring in potential volatility rises.
The upcoming June 27 options expiry could prove crucial. Call options, constituting 63% of existing open interest, present a net bullish stance. Conversely, the concentration of 92% of put options below the $2,700 mark signals that security remains a viable floor, even as bulls anticipate clearing resistance levels.
Competitive Dynamics: ETF Threat and Market Caution
Eth’s considerable 49% price appreciation since May contrasts sharply with modest gains in competitors like SOL (8%) and XRP (2%). Market participants are voicing concern that pending SEC ransom for rival altcoins could disrupt ETH’s market share and momentum.
Bitcoin Seizes Institutional Narrative Shift
Contextual shifts highlighting ETH’s perceived reduced appeal occurred alongside major announcements, including Trump Media Group – President Donald Trump’s company – executing a significant $2.5 billion Bitcoin treasury plan.
Furthermore, officials affiliated with the White House President’s Council on Digital Assets, such as Bo Hines, indicated potential near-term transparency regarding a US Strategic Bitcoin Reserve, further elevating BTC’s institutional profile.
The substantial increase in protective ETH options does not, however, strongly suggest an impending bear market collapse. Most expiring put options are strategically set below the crucial $2,700 support, which, combined with lingering bullish open interest, creates a technical framework favouring price stabilities.
