Lucía Peña
After a blazing rally in July, crypto markets are showing signs of exhaustion — and traders are positioning for a potential pullback. According to derivatives platform Derive.xyz, the market outlook for Bitcoin (BTC) and Ethereum (ETH) options expiring on August 29 is now clearly tilting bearish.
Data from Derive indicates a significant increase in put options, suggesting that investors are hedging against possible downside in the final stretch of the month.
ETH Traders Target Key Support Levels
Dr. Sean Dawson, Head of Research at Derive, said on Wednesday that put contracts on Ethereum now outnumber calls by more than 10% for the late August expiry. The most heavily targeted strike prices? $3,200, $3,000, and $2,200 — signaling a wide range of potential drawdown scenarios.
As of August 6, ETH was trading around $3,624, down over 4% week-over-week, according to PRIME’s data.
“The setup is aligned with expectations for anything from a moderate dip to a sharper correction,” Dawson noted.
Bitcoin Faces Even Stronger Bearish Pressure
The put-to-call imbalance is even more dramatic for Bitcoin. Dawson reports that puts exceed calls by nearly 5 to 1. A majority of the bearish bets are centered around the $95,000 strike, followed by $80,000 and $100,000, suggesting traders are preparing for a potential return below six figures.
BTC was changing hands for approximately $114,075 today, marking a 3% decline over the past seven days.
Skew and Volatility Reveal Shifting Sentiment
Options skew — a measure of demand for puts vs. calls — has flipped notably over the past month. BTC’s 30-day skew dropped from +2% to -2%, while ETH’s skew fell from +6% to -2%, confirming increased appetite for downside protection.
Meanwhile, implied volatility for the month stands at 35% for BTC and a higher 65% for ETH. The widening 30-point volatility gap suggests that traders expect more turbulence in ETH’s price action.
Mixed Signals on Price Probabilities
Despite the bearish options activity, Derive’s probability models present a mixed outlook:
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25% chance ETH dips below $3,000 by August 31
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30% chance ETH finishes above $4,000, doubling from 15% last week
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BTC has an 18% chance to revisit $100,000 before the month ends
Fed Policy in Focus
The recent shift in sentiment followed the Federal Reserve’s July meeting, where rates were held steady due to ongoing inflation and economic uncertainty. But a surprise twist emerged: Two Fed officials — Christopher Waller and Michelle Bowman — voted for rate cuts, marking the first dissent in 30 years.
This rare division has boosted market hopes that a policy pivot could come as soon as September. According to the CME FedWatch Tool, there’s now an 85.5% probability that the Fed will ease interest rates at the next meeting.
