and Solana’s stand out as the major cryptocurrencies with a key sentiment gauge showing bullish momentum, while their peers bitcoin , and ether remain stuck in the gloom.
This key sentiment gauge, known as the 25-delta risk reversal, is actually an options strategy involving the simultaneous purchase of a 25-delta call and sale of a 25-delta put, or vice versa. The ’25-delta’ refers to options that are moderately out-of-the-money, meaning their strike prices are away from the current market price and therefore relatively inexpensive.
This strategy reveals market sentiment by comparing implied volatilities of these bullish call options calls and put options, which offer downside protection. A positive risk reversal indicates traders are paying a premium for calls over puts, signaling bullish expectations, while a negative reading reflects bearish bias. Deribit is the world’s largest crypto options exchange, accounting for over 80% of the crypto options activity.
As of writing, XRP and SOL risk reversals were positive across all available expiries – Oct. 31, Nov. 28, Dec. 26 – on Deribit, indicating a bias for calls, according to data source Amberdata. A call buyer is implicitly bullish on the market while a put buyer is looking to hedge his portfolio against or profit from an expected price drop.
The renewed bullishness follows a spike in demand for puts following the Oct. 10 crash that saw XRP’s price tank as low as $1.77 from $2.80 on some exchanges. As of writing, XRP changed hands at $2.33, according to CoinDesk data. SOL crashed to $188 from $220 on the same day and has since remained under pressure, just as XRP.
The constructive sentiment starkly contrasts bitcoin’s risk reversals which shows puts trading at a premium relative to calls across all tenors, right out to the September 2026 expiry. Clearly, BTC traders remain concerned about downside risks.
In ETH’s case, the bearishness prevails out to the December expiry options, followed by bullish pricing in subsequent expiry options.
Risk reversals are widely tracked to gauge market sentiment; however, it is worth noting that while generally reliable, risk reversals tied to XRP and SOL may be less precise indicators due to the relatively smaller market size, volume, and open interest compared to the billions seen in bitcoin and ether options markets.
Besides the persistent put bias in Bitcoin options, especially in quarterly and longer-dated expiries, this can be partly attributed to the widespread practice of call overwriting, where traders sell higher-strike call options against their long spot holdings to generate additional yield. In other words, the put bias reflects yield generation efforts rather than outright bearish market sentiment.
Perps flash neutral sentiment
While XRP options have flipped bullish, perpetual futures for XRP exhibit a more balanced market, consistent with the neutral funding rates and sentiment seen in perpetual futures for BTC, SOL and ETH.
At press time, annualized perpetual funding rates (charged every eight hours) hovered near zero, indicating a neutral sentiment, according to data source Velo. This subdued demand for leveraged bullish exposure across these major cryptocurrencies is typical traders struggling to regain confidence following a price crash.
The recent market crash liquidated leveraged futures bets worth $20 billion, causing massive wealth destruction.
Perpetual futures are derivative contracts that allow traders to speculate on the price of an asset, like cryptocurrencies, without an expiration date. These contracts use a funding rate mechanism, which is a periodic payment exchanged between traders holding long and short positions to keep the futures price aligned with the underlying asset’s spot price.
When funding rates are positive, it means perpetual futures are trading at a premium to the spot price, signaling increased demand for leveraged bullish exposure. Negative rates suggest otherwise.