What You Need to Know:
- Traders on Derive are gearing up for potential downside volatility in Bitcoin (BTC), indicating a contrasting trend from centralized platforms like Deribit.
- Put options, which make up over 70% of the recent trading volume, reflect a defensive approach by BTC traders on Derive.
- Interestingly, those trading on Derive seem to be bullish on Ethereum (ETH).
Bitcoin options activity on the decentralized platform Derive shows that traders are preparing for possible price declines in the coming weeks.
As of Monday, roughly 20% of Derive’s total BTC options open interest—which amounts to more than $54 million—was focused on put options expiring on July 11, with strike prices set at $85,000, $100,000, and $106,000.
DEX traders chase downside bets in BTC. (Pixabay)
“This seems to suggest traders are bracing for potential declines, likely due to macroeconomic uncertainties or profit-taking following recent gains,” noted Nick Forster, founder of Derive.
A put option allows the holder to sell the underlying asset, such as BTC, at a specified price before or on a future date. Open interest refers to the dollar value of active options contracts at a given moment.
Forster pointed out that put options made up over 70% of trading activity in the last 24 hours, which indicates that BTC traders are taking a conservative stance.
This bearish sentiment is in stark contrast to the activity on Deribit, where traders have shifted away from put options for July expiry in favor of buying call options, betting on price increases as BTC surged over 7% last week, bouncing back from levels below $100,000.
DEX Traders Bullish on ETH
On Derive, traders exhibit a bullish sentiment towards ETH as nearly 30% of open interest centers on call options with strike prices of $2,900, while another 10% is focused on the $3,200 strike.
“This positioning seems motivated by expectations surrounding ETHCC in Cannes, an event known for product launches and ecosystem expansion. Traders anticipate catalysts that could trigger upward price momentum,” Forster explained.
