Bitcoin and Ethereum Traders Hedge as Market Eyes Summer Volatility

Bitcoin (BTC) and Ethereum (ETH) traders are bracing for summer volatility, turning to risk reversal strategies to protect gains amid a largely sideways market. As of now, BTC trades at $101,462.68 and ETH at $2,274.33.

Data from Deribit and Amberdata shows negative 25-delta risk reversals for both BTC and ETH through the summer months, signaling a growing demand for put options over calls. This suggests traders are actively hedging against potential downside risks, a view echoed by Singapore-based QCP Capital, which noted increased protection across June to September contracts.

A 25-delta risk reversal involves simultaneously buying a put and selling a call—or vice versa—to express directional bias. Traders typically use this to hedge spot or futures exposure, especially during uncertain times.

Paradigm’s over-the-counter data revealed BTC’s top trades last week included a bearish risk reversal and a put spread. ETH traders also favored downside strategies, including a $2,450 put purchase and a short volatility strangle.

Bitcoin has hovered above the $100,000 mark for over 40 days. Yet, profit-taking and miner selling have offset institutional demand via spot ETFs. Coinbase Institutional highlighted that BTC’s recent price action has turned range-bound, noting a rise in short-term protective positioning through put options. The 25-delta put-call skew on 30-day contracts also rose, indicating elevated caution.

BTC also closed below its 50-day simple moving average for the first time since April, raising the risk of further chart-driven selling and a potential drop under $100,000.

Still, not all sentiment is bearish. Analyst Cas Abbé pointed to strong on-balance volume, suggesting potential upside toward $130,000–$135,000 by Q3 end. Traders remain cautious, but some see a bullish breakout ahead.