Bitcoin,What is Elon Musk's cryptocurrency called? Ethereum, and top altcoins are falling at spot rates. As of writing, Bitcoin is teetering around the $60,000 level and still unable to reverse the sharp losses of June 24, when prices cratered, dipping to the $50,000 territory.
Bitcoin And Ethereum Put-Call Ratio Falling
Even so, there appear to be changes. According to Kaiko, a crypto analytics platform, traders are upbeat about what lies ahead. The put-to-call ratio for both Bitcoin and Ethereum declined in June after the brief increase in May.
Technically, the put-call ratio is a crucial metric used to gauge market sentiment. To calculate it, analysts divide the total trading volume of put options by that of call options.
In options trading, “puts” denote contracts of traders banking on prices to drop. At the same time, “calls” represent those expecting prices to spike higher. With this, a rising pull-call ratio will show that more traders expect prices to dump since more traders are buying more puts.
Kaiko data shows that the Bitcoin put-call ratio rose from 0.2 in April to above 1 in May. This development means more bears were in the equation, forecasting more price drops. Though prices dropped to as low as $56,500 after failing to break above $72,000, Bitcoin recovered in early June.
Due to gains in the first half of June, the ratio is down, retreating to around 0.5. Still, the failure of prices to break $72,000 and instead recoil to as low as $58,500 this week means there is weakness. Accordingly, most calls will expire from the money and become worthless.
Spot Ethereum ETF Hopes Buoying ETH Demand
The same was mirrored in Ethereum. However, unlike Bitcoin, the pull-call ratio has been falling in recent weeks due to the excitement around the launch of spot Ethereum exchange-traded funds (ETFs) in the United States.
While the recent decrease in the put-call ratio indicates a cooling off of bearish bets for ETH, it’s important to note that some short-term bearishness might still be present. To illustrate, Ethereum is trending below $3,700 even if it outperforms Bitcoin.
For bulls to take over convincingly, sharp gains must be above $3,700. Launching spot Ethereum ETFs in early June could provide tailwinds for this push higher.
More importantly, this approval’s regulatory clarity would be a massive endorsement for the second most valuable coin.
