Put selling strategy becomes mainstream—BTC and ETH traders anticipate decreased volatility

Bitcoin (BTC) and Ethereum (ETH) traders are speculating on market stabilization and are increasingly shifting towards volatility selling strategies such as put-selling. The implied volatility (IV) index of both cryptocurrencies has fallen to their lowest level in several months, highlighting the fact that market participants are anticipating short-term risk reduction and market calming. This move remains unfazed in the face of headwinds such as geopolitical tensions and slowing demand for Bitcoin ETFs.

Put-selling accelerates in the options market

In the options market recently, both put and call selling have increased rapidly, indicating a shift in strategies among traders looking to profit from reduced volatility. The trading patterns observed on Deribit reveal that the majority of nominal trades over the past week were focused on volatility selling strategies rather than pure directional bets.

Markus Thielen, founder of 10xResearch, commented, “From an options market perspective, this compression reflects reduced short-term uncertainty and a greater likelihood of consolidation than larger directional movements,” noting that strategies such as put-selling represent trader psychology. According to Thielen, “Traders appear to be unhedging and supplying volatility through range-based strategies, which is consistent with the declining demand for near-expiration protection.”

The option itself is a derivative contract that gives the buyer the right to buy or sell the underlying asset (BTC or ETH) at a predetermined price at a specific date and time in the future. Put selling is the sale of this put option, which is a strategy in which the seller owes the buyer a downside risk protection obligation. On the other hand, a call option gives the right to buy, giving the buyer a choice to rise. It is common for traders to sell both calls and puts when market stability is expected and vice versa when a significant movement is expected.

Bitcoin and Ether’s volatility indices hit multi-month lows

BTC’s 30-day implied volatility (IV) has declined significantly. BTC’s annualized conversion IV, as measured by Deribit’s DVOL index, has now dropped to 40%, hitting its lowest price since October 2025. According to TradingView data, the index hit a high of 59% during the November 2025 sell-off, and the subsequent decline is clear.

Ethereum’s volatility situation also shows a similar trend to BTC. ETH DVOL is below 60%, its lowest level since September 2025, marking a decline from its peak of 80.38 in November 2025. The BTC volatility index BVIV provided by Volmex also confirms a significant drop in expected volatility.

The decline in these volatility indicators is evidence that traders are not rushing into options or rushing to buy hedging contracts like they did in October or November. This means that even with weak demand for U.S.-listed spot Bitcoin ETFs and a strong dollar index suggesting downward pressure, traders are expecting a calmer and less risky market outlook.

Ethereum risk gap is rapidly narrowing

Ethereum’s risk perception of Bitcoin has dropped sharply, indicating that traders are clearing hedging transactions in Ethereum’s native token more quickly.

The spread between the 30-day implied volatility index of BTC and ETH fell to 16 last week, the lowest level since April 2025. In August 2025, when it was compared, this spread had peaked above 30. The faster pace of Ethereum’s volatility decline suggests that speculative or event-driven positioning is being dissolved more aggressively, reinforcing the broader signal that short-term tail risks are easing rather than increasing.

The Ether-Bitcoin volatility spread remains positive, indicating that traders expect ETH’s price to fluctuate slightly more than Bitcoin.

Market Sentiment and Strategic Turning Points

Overall, both BTC and ETH are expected to stabilize, but ETH is expected to fluctuate slightly. This shift in psychology is evident in the rise in volatility selling strategies, including put-selling, as traders anticipate a reduction in uncertainty and a consolidation phase. While there are external factors such as geopolitical tensions and the strength of the dollar index, market participants are betting on the arrival of a calmer market environment by building positions in the options market.