Bitcoin and Ethereum Prices Surge: Key Insights and Market Trends

Bitcoin and Ethereum Prices- Options Market Signals Bearish Sentiment for Bitcoin and Ethereum

Bitcoin and Ethereum Prices– Prices for the two largest cryptocurrencies, Bitcoin (BTC) and Ether (ETH), have surged nearly 10% from Friday’s lows. This rebound is driven by positive signals from critical order book metrics and anticipation of a Federal Reserve interest-rate cut next week.

Short-Term Concerns Despite Rebound

Despite the recent bounce, traders remain cautious. Options-based risk reversals, which measure market sentiment, indicate a potential short-term weakness in BTC and ETH prices. QCP Capital notes that risk reversals until October are still skewed towards puts in both BTC and ETH.

Options Market Insights

A positive risk reversal suggests that call options are more expensive than puts, reflecting bullish sentiment. Conversely, a negative figure indicates a bearish outlook. Deribit Insight’s Tony Stewart observed that Fast money continued to add to Puts buying 1-week $49-$53k Puts when BTC <$55k. This suggests growing concern that BTC could fall to $50,000 or even $40,000.

Impact of Recent Economic Data

The weak U.S. nonfarm payrolls (NFP) data has reignited recession fears, leading to increased risk aversion in financial markets. Historical data shows that recessions and risk aversion often follow the beginning of a Fed rate-cutting cycle, with the central bank expected to cut rates by 25 basis points next week.

Alex Kuptsikevich, Senior Analyst at The FxPro, predicts that caution and a tendency to sell growth will prevail in the market, at least until the release of U.S. inflation data on Wednesday. He believes this trend may continue until the Fed’s decision on September 18th.

Solana (SOL) Shows Resilience

In contrast to BTC and ETH, Solana’s SOL is seen as relatively resilient. Amberdata reports that SOL’s one-month options skew has crossed above zero, indicating a stronger demand for call options compared to puts. This suggests that SOL is expected to outperform ETH in the near term.

Divergent Market Sentiment

Kristian Haralampiev, Structured Products Lead at Nexo, highlighted that traders are making significant moves to protect downside risk in Ethereum, while simultaneously showing appetite for upside potential in Solana. He also noted that Ethereum’s volatility index remains notably elevated compared to Bitcoin’s, signaling potential turbulence ahead for ETH.

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