Data: Ethereum put/call ratio at its highest level in a year

According to Data on encrypted data site Skew, the Ethereum options market tracking measure has reached its highest level in 12 months. The open put/call ratio rose to 1.04, or strong bearish sentiment, its highest level since July 2019. The main reason for the increase in open interest is the increase in the selling of put options.

It has almost tripled in value in the past 3.5 months and has risen almost in a straight line over the past two weeks, from 0.84 to 1.04. In this case, Luuk Strijers, chief operating officer of cryptocurrency exchange Deribit, says: "This usually means the market is more bearish because investors are buying put options to protect their portfolios from potential asset falls."

The main reason for the increase in open interest is the increase in the selling of put options. "In this case, the market makers have long options and the client is a net seller of options. The client is using their ETH position to generate additional revenue," Strijers said.

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Investors with long positions in the cash market are probably selling put options, creating a bullish mood and earning extra income that way. In other words, market investors may use put options as a kind of hedging insurance. "There is a lot of excitement around the new DeFi tokens and most of the collateral locked up on these platforms is in Ethereum. ETH will rebound strongly as the SUPPLY of ETH decreases and demand for DeFi platform levels off," Wrote John Todaro, head of research at TradeBlock on Twitter.

The original address: https://www.coindesk.com/search-for-yield-drives-ethers-put-call-ratio-to-one-year-high

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