Gate Research: ETH Upside May Be Limited as Bearish Positioning Emerges

Market Overview

Over the past week, BTC found solid support around USD 90,000 and entered a consolidation-driven recovery. Price has reclaimed the MA5 and MA10, but remains capped by the MA30 (around USD 95,100). Trading volume has been relatively light, suggesting the rebound is largely technical, with active tug-of-war between bulls and bears. While short-term sentiment has improved, confirmation of a sustained uptrend will require a volume-backed breakout above key moving averages.

Options Market Dynamics

Latest data show BTC implied volatility (IV) holding at 41% and ETH IV at 57%. Notably, ETH IV has fallen to an extremely low 0.8th percentile of the past year, indicating very cautious expectations for near-term price swings.

Over the past week, the 25-delta skew for both BTC and ETH spiked briefly before quickly normalizing. The 7-day skew rebounded sharply after a sell-off, reflecting fading short-term panic and stabilizing sentiment. Medium- to long-term skews remain mildly negative with limited volatility, suggesting ongoing but non-deteriorating hedging demand.

BTC realized volatility rebounded and stabilized at 30–33%, while short-dated ATM IV fell back to around 35%, leading to a rapid compression of the IV–RV spread and a shrinking volatility risk premium (VRP). This points to cooling expectations for sharp short-term moves and highlights the growing importance of structural and directional strategies. ETH, meanwhile, shows declining IV alongside rising RV, with a sharp VRP contraction—despite some late-stage hedging—signaling weaker volatility premiums and more restrained pricing.

Block Trade Structure

This week, risk reversal strategies dominated block trading in BTC and ETH options. Around USD 2.6 billion in BTC and ETH options are set to expire this Friday. The largest block trades were:

• BTC: Buy BTC-300126-98000-C, totaling about 2,525 BTC, with a net premium outlay of roughly USD 5.52 million.
• ETH: Buy ETH-270326-3100-P and sell ETH-270326-3500-C, totaling about 14,000 ETH, with a net premium outlay of approximately USD 1.34 million.

The largest ETH structure was a bearish risk reversal, an options combination used to express a negative outlook. Its core logic involves buying a lower-strike put and selling a higher-strike call, sacrificing upside potential to obtain downside exposure at lower cost. Such strategies can be executed via Gate’s combo strategy order tool.

Platform Update

Gate has launched a streamlined options trading feature—Combo Strategy Orders—designed to help users efficiently respond to various market conditions, including range-bound, gradual uptrends, or downtrends. The feature supports common multi-leg strategies such as spreads and straddles.

With combo strategy orders, users can create multiple option legs in a single transaction and view total cost, PnL profile, and risk exposure in one integrated structure. This removes the need to place legs individually, significantly reducing operational complexity and improving trading efficiency.

Product details: https://www.gate.com/help/other/combinationstrategies/49208