Reading BTC and ETH Sentiment from Crypto Derivatives Metrics
Summary
This weekly report compares Bitcoin and Ether derivatives indicators during a period when BTC weakened and ETH performed better in spot markets. It uses perpetual-swap funding rates, annualized futures yields, at-the-money implied volatility, and options risk reversals to describe positioning. BTC futures yields had settled into a relatively flat term structure, while ETH yields sloped upward. ETH funding turned negative despite its stronger relative spot performance, indicating that funding and spot returns offered contrasting sentiment signals.
Options measures also pointed to caution. BTC short-to-mid dated implied volatility rose as spot declined, and its risk reversals showed a premium for out-of-the-money puts. ETH’s short-dated volatility was higher than its longer-tenor volatility, while its skew was described as less bearish than BTC’s, though short-dated puts still carried a premium to calls. The report combines these metrics into a snapshot of market expectations rather than a directional model. It offers no trading rules or backtest, and options prices and funding can reflect hedging, supply, and positioning as well as outright forecasts.
Key ideas
- BTC and ETH spot performance diverged, while derivatives metrics gave mixed signals about relative sentiment.
- BTC futures yields were relatively flat, whereas ETH futures yields had a positively sloped term structure.
- Negative ETH funding contrasted with ETH’s stronger spot performance over the reported period.
- BTC options skew favored downside protection, while ETH skew was comparatively less bearish.
- Implied volatility and risk reversals describe market pricing and positioning but do not guarantee future direction.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.