• Put options for ETH rose significantly, indicating bearish sentiment within the market.
• Implied Volatility witnessed an uptick as price declined.

Despite earnest endeavors from Ethereum’s [ETH] development team to enhance the protocol, the price of ETH experienced a significant downturn in the past month. This decline exaggerated the bearish sentiment in the market towards the king of altcoins.

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Putting it all on the line

According to Greeks.live, Ethereum experienced a surge in bearish options trading activity. The traders carried out significant put options trades involving more than 56,000 contracts, totaling over $100 million in nominal value.

This substantial trading volume represented around 30% of the overall trading volume across exchanges.

The trades were categorized into three distinct segments. The first involved “Naked Buy Weekly Out-of-The-Money (OTM) Put Options,” which included buying contracts to sell Ethereum at a certain price and time, even if Ethereum’s price falls.

The second strategy was a “Bear Spread,” where contracts were bought to sell Ethereum at a lower price of $1800, while simultaneously selling contracts to sell at an even lower price of $1600.

The third approach, known as “Risk Reversal,” entailed buying contracts to buy Ethereum at a higher price of $2100 with selling contracts to sell at a lower price of $1600.

It is pertinent to note that whale behavior showcased cynicism in the short term. However, traders seemed optimistic about Ethereum’s long-term prospects.

The above behavior further indicated that traders were not expecting the price of ETH to go below $16,000 and would hold support at that price level.

Uncertainty ahead?

The rise in bearish sentiment among traders could be attributed to the g

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Author: Himalay Patel

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