The bearish signals for Ethereum are strengthening, and the options market is reflecting defensive sentiment.

Recent changes in the cryptocurrency futures and options market indicate that the bearish signals for ETH are becoming increasingly clear. According to Gate Research analysis on January 15, notable shifts are occurring in the crypto trading market, reflecting a change in trader sentiment.

Market Sentiment Revealed in $2.6 Billion Options Trading

Approximately $2.6 billion worth of BTC and ETH options are set to expire this Friday. Notably, the implied volatility(IV) for BTC and ETH has decreased to 41% and 57%, respectively, compared to last week. This suggests that the extreme fear in the market is easing somewhat.

Looking at the 25-Delta Skew(25-Delta Skew) for BTC and ETH over the past week, we can observe a recovery in short-term defensive sentiment after a sharp spike. While panic has somewhat subsided, medium- and long-term hedging demand remains, and the market overall continues to be cautious.

Declining Implied Volatility and Block Trade Analysis

The largest ETH options position among block trades involves a combination of ETH-270326-3100-P buy and ETH-270326-3500-C sell, totaling approximately 14,000 ETH, with a net premium expenditure of about $1.34 million. This trading setup indicates traders are expecting limited-range movements.

The most sizable combined trade strategy was a risk reversal short position. This reflects cautious traders seeking downside protection while pursuing profitability.

Simplifying Complex Trades with Combo Strategy Orders

In this complex options trading environment, Gate offers a ‘Combo Strategy Order’ feature to help users respond effectively to various market scenarios. This feature is optimized for narrow-range trading, gradual upward or downward scenarios, and other trading conditions.

Combo Strategy Orders support various multi-leg options strategies, including spreads and straddles. Users can configure multiple option legs simultaneously and view total costs, profit and loss structures, and risk exposure in a consolidated format. This allows for quick construction and management of multi-leg strategies without manipulating each leg individually, significantly reducing operational complexity and increasing trading efficiency.

Currently, BTC volatility over 24 hours is -2.36%, and ETH volatility is -3.54%, with signals from the options market and movements in the spot market both reflecting a defensive sentiment.