Ethereum
Bitcoin and Ethereum traders cool on bearish bets and put-call ratio declines in June
Bitcoin, Ethereum and top altcoins fall to spot rates. At the time of writing, Bitcoin is hovering around the $60,000 level and is still unable to reverse the sharp losses of June 24, when prices plummeted, plunging all the way to the 50,000 zone. $.
Bitcoin and Ethereum put-call ratio drops
However, there seem to be changes. According to Kaiko, a crypto analytics platform, traders are optimistic about what awaits us. The put-to-call ratio for Bitcoin and Ethereum declined in June after the brief increase in May.
Technically, the put-call ratio is a crucial metric used to gauge market sentiment. To calculate it, analysts divide the total trading volume of put options by that of calls.
In options trading, “puts” refer to traders’ contracts betting on a decline in price. At the same time, “calls” represent those who expect prices to rise. With this, an increasing pull-call ratio will show that more traders are expecting prices to fall as more traders buy more puts.
Kaiko data shows that Bitcoin’s put/call ratio increased from 0.2 in April to over 1 in May. This development meant that more bears were in the equation, predicting more price declines. Although prices fell as low as $56,500 after failing to break above $72,000, Bitcoin recovered in early June.
Due to the gains recorded during the first half of June, the ratio is falling, falling to around 0.5. Nonetheless, the inability of prices to break above $72,000 and fall back to as low as $58,500 this week means there is weakness. As a result, most calls will time out and lose all value.
Spot Ethereum ETF hopes to boost demand for ETH
The same was reflected in Ethereum. However, unlike Bitcoin, the pull-call ratio has declined in recent weeks due to excitement over the launch of Ethereum spot exchange-traded funds (AND F) in the USA.
Although the recent decrease in the put-call ratio indicates a cooling of bearish bets for ETH, it is important to note that some short-term bearishness could still be present. To illustrate, Ethereum is trading below $3,700 even though it is outperforming Bitcoin.
For bulls to convincingly take over, big gains need to be above $3,700. The launch of Ethereum spot ETFs in early June could provide a tailwind to this upward push.
More importantly, the regulatory clarity of this approval would be a massive endorsement for the second most valuable coin.
Featured image from Canva, chart from TradingView