Bitcoin vs Ethereum: Options Traders Bet Big on July’s Crypto Showdown

Wall Street's degenerate cousins are at it again—this time with leveraged bets on crypto's top contenders.

### The Smart Money's Playing Chicken With Volatility

Futures markets show traders loading up on out-of-the-money calls for both assets. Someone's about to get very rich or very rekt.

### ETH's Gas Fees Strike Back

Ethereum's network upgrades finally make defi trades viable again. Just in time for the speculative frenzy.

### BTC: The OG's Institutional Edge

BlackRock's spot ETF inflows hit $200M daily—because nothing says 'store of value' like a 20% weekly swing.

The only certainty? Some hedge fund manager will blame 'macro conditions' when their theta gang plays explode.

Positioning Reflects Expectations of Larger Moves Ahead

Looking forward, Derive’s options market activity suggests that traders are preparing for more pronounced price action in July, particularly for Ethereum.

Open interest on Derive shows a wide range of call and put positions around the $130,000 and $90,000 marks for Bitcoin, indicating that traders are split between anticipating an upside breakout and preparing for a potential price pullback.

According to Derive’s probability modeling, there’s only a 10% chance that BTC will reach above $130,000 by the end of August. However, the positioning reflects that market participants are not ruling out a sharp MOVE in either direction.

The broader macroeconomic environment is also playing a role. A stronger-than-expected US labor market report released Thursday showed unemployment falling to 4.1%, beating expectations.

This reduced hopes for an imminent Federal Reserve rate cut, as evidenced by the CME FedWatch tool, which now shows a 95% chance of rates remaining unchanged in the upcoming Federal Open Market Committee (FOMC) meeting.

With inflation and interest rates continuing to influence investor sentiment, these developments are likely contributing to the cautious but watchful positioning seen in crypto options markets.

Ethereum Sentiment Leans Bullish Amid Fundamental Catalysts

While both assets are seeing cautious setups, Ethereum’s options market reveals a more bullish shift. According to Derive data, nearly 80% of July call open interest for ETH is situated above the $3,000 mark, with close to 30% placed at strikes beyond $3,500.

Dawson attributes this bias to Ethereum’s growing narrative strength, particularly with Robinhood’s announcement of launching tokenized stocks and a LAYER 2 solution built on Arbitrum. These developments, he argues, support Ethereum’s utility case and may encourage capital rotation into ETH over the coming weeks.

Dawson wrote

Traders are betting on a big July. With volatility suppressed and positioning split, all eyes are now on the Fed, macro data, and further geopolitical developments. ETH has the stronger momentum narrative, but BTC’s options market is coiled for a decisive move.

Featured image created with DALL-E, Chart from TradingView