Investor Sentiment Favors Ethereum Over Bitcoin, Report Shows

A recent analysis indicates a notable divergence in investor sentiment between Ethereum (ETH) and Bitcoin (BTC).

Bybit, the world’s second-largest cryptocurrency exchange based on trading volume, released its most recent Crypto Derivatives Analytics Report in partnership with BlockScholes.

The report highlights a bullish sentiment towards ETH based on market trends and trading signals across spot trading volume, futures, options, and perpetual contracts. Investors are showing optimism towards ETH due to the upcoming introduction of the first Ether Spot ETFs in the United States. This positivity is evident in ETH’s sustained volatility premium over BTC, even amidst recent market fluctuations and sell-offs.

Study findings reveal that despite the recent downturn in the market, ETH futures have rebounded in open interest more rapidly than BTC. This suggests a strong market narrative surrounding ETH and its future potential. Moreover, increased trading volumes in ETH perpetual contracts indicate significant long positions taken strategically in anticipation of market developments.

During the recent crypto market decline, there was a notable increase in trade volume for perpetual swaps, with numerous traders closing their long positions. The report suggests that the heightened trade volume activity in ETH may be attributed to traders being heavily invested in long positions, possibly in anticipation of the ETF trading commencement.

Furthermore, ETH options market volatility remains elevated, especially in anticipation of ETF approval, contrasting with the more defensive stance observed in BTC options. The report indicates that ETH options exhibit a 10–15 point premium in volatility compared to BTC across all tenor points on the term structure. Additionally, ETH has shown a quicker recovery in its volatility smile skew towards out-of-the-money (OTM) calls compared to BTC. Notably, there has been a substantial increase in trading volume in ETH calls, surpassing the activity in its puts.

Eugene Cheung, Bybit’s Head of Institutions, remarked on the latest data, emphasizing ETH’s resilience and market attractiveness as regulatory milestones approach. Investors are evidently positioning themselves optimistically amid rising market expectations.