The Ethereum derivatives market has developed pessimistic expectations regarding the near-term price outlook, according to The Block.
“Near-term options indicate risks of sharp movement in either direction,” stated QCP Capital.
Cryptocurrency derivatives trader Gordon Grant reached similar conclusions.
“You can see a significant divergence in Ethereum options compared to digital gold. The term structure remains sharply inverted with a skew, demonstrating demand for gamma and its premium with the Bitcoin counterpart, as well as a gamma premium over vega,” he explained.
An increasing number of traders are buying puts ahead of the April 18 expiration. According to Deribit, the put-to-call ratio has risen to 1.04. A ratio above 1.0 indicates a skew towards puts, which is a sign of bearish sentiment in the market.
Analysts at QCP Capital also noted market pessimism in the risk reversal strategy metrics.
“Metrics have become very negative for the near term. […] This indicates nervousness,” they added.
Experts attributed the worsening expectations to macroeconomic conditions. They forecasted the status quo to persist amid the ongoing conflict in the Middle East and weakness in the US stock market.
Earlier, analysts recorded an outflow from Ethereum funds for the fifth consecutive week.