Bitcoin And Ethereum Traders Cool With Bearish Bets, Put-Call Ratio Retreating In June

Bitcoin, Ethereum, and top altcoins are dropping in virtual amounts. As of writing, Bitcoin is hovering around the $60,000 level and is unable to reverse the massive losses of June 24, when prices dropped, retreating to the $50,000 area.

Bitcoin and Ethereum Put-Call Ratio Falling

However, there seems to be a change. According to Kaiko, a crypto analysis platform, traders are there to be happy for what is to come. The put-to-call ratio for both Bitcoin and Ethereum fell in June after a brief rise in May.

Technically, the put-call ratio is an important metric used to measure market sentiment. To calculate it, analysts divide the total trading volume of put options by call options.

In options trading, “putting” refers to the seller’s contracts that keep prices down. At the same time, “calls” represent those who expect prices to rise significantly. With this, an increasing call pull ratio will indicate that many traders expect prices to drop as more traders buy more puts.

Kaiko data shows that the average Bitcoin put-call rose from 0.2 in April to over 1 in May. This development means more bears in math, predicting further price declines. Although prices fell to $56,500 after failing to break above $72,000, Bitcoin recovered in early June.

Due to gains in the first half of June, the ratio decreased, falling back to around 0.5. Nevertheless, the failure of prices to break $ 72,000 and instead of retreating up to $ 58,500 this week means that there is weakness. Likewise, most calls will expire in the money and be worthless.

Spot Ethereum ETF Hopes for Buoying ETH Demand

The same is shown in Ethereum. However, unlike Bitcoin, the call rate has been declining in recent weeks due to the excitement surrounding the launch of Ethereum exchange-traded funds (ETFs) in the United States.

Although the recent decline in the put-call rate indicates a cooling of ETH bets, it is important to note that some short-term bets may still exist. For example, Ethereum is trending below $3,700 even as it outperforms Bitcoin.

For the bulls to take over convincingly, sharp gains must be above $3,700. Present it Ethereum ETFs at the beginning of June can provide the volatility of this high breakout.

More importantly, the regulatory clarity of this approval would be a major guarantee for the second most valuable coin.

Featured image from Canva, chart from TradingView