BTC Traders Seek Topside Option Plays After Powell’s Transitory Inflation Remark, ETH Still Lags in Sentiment
Bitcoin (BTC) investors have taken a bullish turn, reflected in their growing interest in topside options bets following the recent Federal Reserve meeting. Unlike previous weeks marked by bearish sentiment, the market now shows a positive outlook for BTC, signaling a renewed confidence among traders.
Current data from Amberdata indicates that both short-term and long-term risk reversals for Bitcoin are in positive territory. This development suggests an increased demand for call options—contracts that give buyers the right to purchase the underlying asset at a set price—over put options, which confer the right to sell. This is in stark contrast to the weeks leading up to the Fed’s meeting, during which traders favored bearish options, fearing a downturn.
Notably, the institutional trading platform Paradigm highlighted recent flows on their platform: “Frontend skew flipped calls. Flows featured 21 Mar outright calls and calendars bought, while 28 Mar puts were sold.” This activity, conducted through over-the-counter platforms like Paradigm and later listed on exchanges such as Deribit, indicates that large traders are positioning themselves for potential gains.
The shift in sentiment follows the Fed’s decision to maintain its forecast for two interest rate cuts within the year. This news was coupled with a reassessment of economic conditions, where Fed Chairman Jerome Powell minimized concerns over inflationary pressures associated with tariffs, labeling them transitory. These statements have likely bolstered investor optimism regarding Bitcoin’s performance.
Moreover, the recent conclusion of a long-standing legal dispute between the SEC and Ripple Labs—developers of XRP, which ranks as the fourth largest cryptocurrency by market capitalization—has contributed positively to the overall market sentiment.
### Ether Options Lag Behind
In contrast to Bitcoin, ether (ETH) options have not shown the same resiliency. Current risk reversal data for ether indicate a continued preference for put options, particularly as traders maintain a cautious stance ahead of the Ethereum “Pectra” upgrade. Even with impending technological enhancements—including smart accounts and improved validator user experience—investor sentiment regarding ether remains tempered.
Ethereum’s recent test network launch, dubbed “Hoodi,” is preparing for an upgrade expected on March 26, but has yet to sway investor sentiment significantly. Traders might be hedging against risks in the altcoin market, as ether’s price trends are often viewed as indicative of broader altcoin movement.
Amidst these developments, Bitcoin’s resilience and rapid recovery contrasts sharply with ether’s stagnant performance, creating a dynamic where traders must navigate varying levels of risk across cryptocurrencies.
