A recent report highlights a significant divergence in investor sentiment between Ethereum (ETH) and Bitcoin (BTC). Bybit, recognized as one of the largest cryptocurrency exchanges by trading volume, has published its latest Crypto Derivatives Analytics Report in collaboration with BlockScholes.

According to the report, market trends and trading signals across spot trading volume, futures, options, and perpetual contracts indicate a growing bullish sentiment toward ETH. Investors are optimistic about ETH due to the forthcoming launch of the first Ether Spot ETFs in the United States. This optimism is evident in ETH’s sustained volatility premium over BTC, despite recent market fluctuations and sell-offs.

Study Findings

Despite the recent market downturn, ETH futures have shown a quicker recovery in open interest compared to BTC. This suggests a strong market narrative around ETH and its future prospects. Additionally, higher trading volumes in ETH perpetual contracts indicate substantial long positions, driven by strategic positioning ahead of market developments.

During the recent crypto sell-off, there was a notable increase in trade volume for perpetual swaps, with many traders closing their long positions. The report mentions,

“The larger trade volume activity in ETH suggests that traders were caught in long positions in greater magnitude, possibly due to positioning ahead of an expected ETF start-of-trading date.”

Furthermore, the ETH options market continues to show high volatility, particularly in anticipation of ETF approval, contrasting with the more defensive stance seen in BTC options. According to the report, ETH options hold a 10–15 point premium in volatility compared to BTC across all tenor points on the term structure. Additionally, ETH has recovered its volatility smile skew toward out-of-the-money (OTM) calls much faster than BTC.

There has also been significant trading volume in ETH calls, far surpassing the activity in its puts. Eugene Cheung, Bybit’s Head of Institutions, noted,

“The latest data underscores ETH’s resilience and market appeal as we approach key regulatory milestones. Investors are demonstrably positioning themselves favorably amidst growing market expectations.”

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