Traders Turn Bearish on BTC and ETH as Derive Options Data Signals Downside Risk

Key highlights:

• Options data from Derive.xyz shows a significant tilt toward put contracts for both Bitcoin and Ether ahead of the August 29 expiry.
• Bitcoin put open interest is nearly five times that of calls, with traders eyeing a move below the $100K level.
• Despite bearish hedging, probability models still assign a 30% chance ETH ends August above $4,000.

As the cryptocurrency market cools off following a strong rally in July, options traders are increasingly positioning for downside risks heading into the end of August. Data from crypto derivatives platform Derive.xyz indicates a decisive shift toward bearish sentiment, with a sharp rise in demand for put options on both Bitcoin (BTC) and Ethereum (ETH).

30 day skew has been grinding down over the last month as traders gear up for a potentially rocky August.

BTC: Down from +2% to -2% (pic below)

ETH: Down from +6% to -2%

Negative skew means puts are more expensive than calls as traders buy up downside insurance ????

— Sean | Derive (@SeanNotShorn) August 6, 2025

Bitcoin: Traders bet on sub-$100K correction

Bitcoin has seen the more pronounced bearish tilt among the two leading crypto assets. According to Derives Head of Research Dr. Sean Dawson, open interest in BTC puts for the August 29 expiry is nearly five times higher than call interest. Strikingly, almost half of this activity is concentrated at the $95,000 strike, while additional clusters form at the $80,000 and $100,000 levels.

This positioning signals traders are heavily hedging against, or outright betting on, a decline below the psychologically significant $100,000 mark. As of August 6, BTC was trading around $114,075, having dropped more than 3% over the past week.

Supporting this bearish sentiment is the recent move in 30-day skew, a metric that gauges relative demand for puts versus calls. For BTC, skew has slipped from +2% to -2% over the past month, reflecting increased demand for downside protection.

Ether: Pullback fears but potential upside remains

While not as extreme as Bitcoin, Ether options also reflect a bearish lean. Derive data shows that put interest for ETH exceeds call interest by just over 10% for the same August 29 expiry. The highest concentration of puts is at the $3,200, $3,000, and $2,200 strikes, aligning with trader expectations for anything from a moderate retracement to a sharper correction.

ETH has fallen over 4% in the past week, currently hovering around $3,624. However, Derives probabilistic models highlight a more nuanced picture. There is a 25% chance ETH drops below $3,000 this month—but also a 30% chance it finishes August above $4,000, up from just 15% a week prior.

Like BTC, ETH skew has turned negative, declining from +6% to -2% over the past month. Monthly implied volatility stands at 65% for ETH, compared to 35% for BTC, suggesting more price turbulence ahead for Ether.

Macroeconomic backdrop and Fed signals

The shift toward cautious positioning follows the July meeting of the U.S. Federal Reserve, where policymakers kept interest rates unchanged amid persistent inflation concerns. Notably, two Fed governors dissented in favor of rate cuts, the first such move in three decades. This divergence has fueled speculation of a potential Fed pivot at the upcoming September meeting, with the CME FedWatch tool showing an 85.5% probability of eased rates.

While macro signals offer potential tailwinds, traders on Derive appear to be prioritizing protection against near-term downside. With volatility rising and key support levels in focus, the options market suggests a defensive stance heading into the final weeks of summer.

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