Options Sentiment Shifts: Traders Now See ETH as Riskier Bet Than BTC

Ether Sees Rising Risk Premium in Derivatives Market as Traders Turn Defensive

The options market is flashing a caution signal on ether (ETH), with short-term contracts now pricing in higher downside risk relative to bitcoin (BTC). The shift reflects growing uncertainty around ETH’s recent rally and broader concerns over market fragility.

Options Traders Brace for ETH Volatility

According to data from Deribit and Amberdata, ETH’s 25-delta risk reversals — a measure of demand for puts versus calls — have flipped more negative for August and September expiries, currently ranging between -2% and -7%. That means put options, which protect against price drops, are trading at a noticeable premium to calls, a signal of bearish sentiment.

In comparison, bitcoin’s risk reversals are less skewed, with short-dated puts priced at just 1% to 2.5% above calls, suggesting BTC is seen as more stable in the near term.

In options markets, risk reversals are used to measure sentiment: the more expensive puts are relative to calls, the more defensively positioned traders are. A deeply negative reading implies that traders expect elevated downside volatility — in this case, more so for ether than bitcoin.

Ether’s Rally Stalls After Strong July

Ether surged nearly 50% in July, briefly topping $3,940 — a level not seen since early 2025 — outpacing bitcoin’s 8% gain. That rally, however, has started to unwind, with ETH down more than 6% in the past 24 hours to around $3,600. Bitcoin also slipped, losing roughly 3% to trade near $114,380.

Analysts say the sudden divergence in options pricing reflects investor concern that ether’s gains were fueled by temporary flows rather than structural demand. With macro uncertainty building and liquidity tightening, derivatives traders appear to be positioning more cautiously.