Ethereum’s ETH price soared 10% from Monday to Tuesday, reaching a 15-week high of $2,794. Despite this rebound, ETH has struggled to break the $2,800 resistance level over the past month. This resistance coincides with increasing use of downside protection strategies in ETH derivatives markets.
Beyond standard call (buy) and put (sell) options, traders often employ multi-tool strategies to maximize gains above specific thresholds or mitigate losses. Monitoring these demands reveals insights into professional traders’ positioning.
Traders Hedge ETH Downside Risks
From early April to Monday, ETH options’ open interest surged from $6.3 billion to $8.3 billion, signaling heightened institutional participation. Deribit dominates with a 72% market share, making its put-call flow imbalance critical to analyze.
Notable Strategies in Play
- Short Risk Reversal: Profits from bearish volatility by buying puts and selling calls, netting premiums while hedging losses below the put strike price.
- Bear Diagonal Spread: A cost-efficient bearish play involving selling near-term calls and buying longer-dated higher-strike calls, capitalizing on time decay and volatility shifts.
Bullish Sentiment for June 27 Expiry
ETH bulls are optimistic about the monthly options expiry, as calls constitute 63% of total open interest. Currently, 92% of ETH puts are set at $2,700 or lower—rendered worthless if ETH settles above this level.
Market Caution Amid Altcoin Rivalry
ETH’s 49% surge since May contrasts with Solana (SOL) and XRP’s modest 8% and 2% gains. Traders worry ETH’s edge could fade if competing altcoin ETFs gain SEC approval.
Bitcoin’s Dominance and Macro Triggers
Concerns over ETH’s institutional appeal grew after Trump Media & Technology Group announced a $2.5 billion bond/stock offering to establish a Bitcoin treasury. White House advisor Bo Hines hinted at imminent details for a U.S. strategic Bitcoin reserve, stirring community excitement.
FAQs
Q: Why are traders buying ETH downside protection?
A: It’s a hedge—not necessarily a bearish bet. Many June 27 puts target sub-$2,700 levels, suggesting neutral-to-bullish strategies dominate.
Q: What’s driving ETH’s price resistance at $2,800?
A: Derivative market hedging and profit-taking near key psychological levels.
Q: Could altcoin ETFs threaten ETH’s market position?
A: Potential SEC approvals for competitors like SOL or XRP ETFs might divert institutional interest.
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