The crypto market is witnessing a significant shift in volatility trading dynamics, with traders increasingly focusing on Ethereum (ETH) options as Bitcoin (BTC) volatility is perceived to have structurally diminished. This change is attributed to institutional hedging and a lack of catalysts before year-end. Despite low volatility, traders acknowledge the potential for BTC spot prices to rise significantly, possibly reaching millions of dollars.
In response to a 6% drop in ETH to around 4000, traders are actively selling put options, particularly targeting 3900 strike price options expiring over the weekend and in two days. This strategy aims to capitalize on short-term premium sales while financing long-term bullish options, leveraging neutral skew and high volatility following sudden market movements. Although this drop marks the largest long liquidation since March, traders view it as a temporary flush without fundamental catalysts, positioning for profits from volatility compression and time decay.
Traders Shift Focus to ETH Options Amidst Low BTC Volatility
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