Bitcoin And Ethereum Put-Call Ratio Falling, Signaling Upbeat Market Sentiment

Even so, there appear to be changes. According to Kaiko, a crypto analytics platform, traders are upbeat about what lies ahead.

Bitcoin and some leading altcoins are displaying weakness at spot rates. At the last check, BTC was hovering around the $60,000 level and yet to reverse the sharp losses incurred on June 24 when prices crashed to the lower $50,000.

Bitcoin And Ethereum Put-Call Ratio Falling

However, there seems to be a different narrative. According to Kaiko, a crypto analytics platform, traders are optimistic about the next move. The put-to-call ratio for both Bitcoin and Ethereum declined in June following a brief spike in May.

To explain, the put-call ratio is a key metric used to gauge market sentiment. Analysts calculate it by dividing the total trading volume of put options by that of call options.

In options trading, “puts” are contracts for traders betting on prices to decrease, while “calls” are for those expecting prices to increase. With this, a higher put-call ratio will show that more traders expect prices to dump as more traders are buying puts.

Kaiko data shows the Bitcoin put-call ratio rose from 0.2 in April to over 1 in May. This development meant more bears were in the equation, predicting further price decreases. Although prices dropped to a low of $56,500 after failing to break above $72,000, BTC recovered in early June.

But, as prices failed to break $72,000 and instead fell as low as $58,500 this week, the lack of steam shows weakness. As a result, most calls will expire out of the money and become worthless.

Spot Ethereum ETF Hopes Buoying ETH Demand

The same was reflected for Ethereum. But, unlike Bitcoin, the put-call ratio has been falling in recent weeks amid excitement over the launch of spot Ethereum exchange-traded funds (ETFs) in the United States.

While the recent decline in the put-call ratio suggests a cooling off of bearish bets on ETH, it’s worth noting that some short-term bearishness may still be present. For instance, Ethereum is trading below $3,700 even as it outperforms Bitcoin.

For the bulls to take over convincingly, sharp gains need to clear $3,700. The early June launch of spot Ethereum ETFs could provide tailwinds for this push higher.

More so, the regulatory clarity in this approval would serve as a major endorsement for the second most valuable coin.

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