The ether-bitcoin (ETH/BTC) ratio rose more than 2% last week, contrasting with its record of taking losses during bouts of risk aversion, Options data tracked by Amberdata show a stronger bearish outlook for ether, with traders hedging against potential price weakness over the one-week, one-, two-, three- and six-month timeframes. Despite this, traders remain bullish on bitcoin over the long run.
The short-term and long-term ether call-put skews, which measure the implied volatility premium for calls relative to puts, hovered well below zero at press time. This is a sign of relatively higher prices for puts, the options used to protect against price drops. Bitcoin’s one-week, one- and two-month skews show a bias for puts, while the rest show preference for calls.
The persistent bias for long-term BTC calls may be due to the belief that the top cryptocurrency would be the first beneficiary of an eventual positive flip in the macroeconomic environment. BTC continues to be ‘the’ macro asset for the crypto market and could also see some strong inflows as the macro environment shifts, said Noelle Acheson, author of the popular Crypto Is Macro Now newsletter.
Bitcoin is set to undergo its fourth mining reward halving early next year, which has historically paved the way for major bull runs. Last week, both bitcoin and ether took a beating, with the former falling over 10% while the latter lost around 8%. Analysts attributed ether’s outperformance to several factors, including expectations for a launch of ETH futures-based exchange-traded funds and hedging activity of market makers.