Crypto Traders Hedge Against Risks While XRP Stands Strong
Crypto traders are bracing for potential market turbulence following U.S. President Donald Trump’s executive order to establish a digital asset reserve. While the reserve will hold seized Bitcoin (BTC) and altcoins, it does not involve new purchases, leaving many in the market disappointed. This sentiment has led to increased demand for short-term put options on Bitcoin, Ether (ETH), and Solana (SOL), signaling downside fears. However, XRP remains resilient, with bullish trends in options trading.
Short-Term Puts on BTC, ETH, and SOL Surge
A put option provides the right to sell an asset at a predetermined price, offering protection against potential declines. Data from Deribit, tracked by Block Scholes, indicates that traders are prioritizing short-dated puts for BTC, ETH, and SOL over calls. This imbalance suggests that traders expect short-term downward pressure.
“Short-tenor skews for BTC, ETH, and SOL options once again express a demand for puts. April expiries and beyond, however, still maintain a bullish tilt for BTC and ETH, while XRP options hold a positive skew at all tenors longer than one week,” said Andrew Melville, a research analyst at Block Scholes.
XRP Defies the Trend, Showing Bullish Momentum
Unlike Bitcoin, Ether, and Solana, XRP options display a stronger bias toward call options across multiple time frames. This suggests that investors remain optimistic about XRP’s future, possibly anticipating positive regulatory developments or market sentiment.
Market Eyes Crypto Summit and Economic Data
Traders are now turning their attention to Friday’s White House crypto summit, hoping for regulatory clarity that could shift sentiment. Key areas of interest include:
- Clear guidelines on securities laws
- Structure of Trump’s digital asset reserve
- Possible regulatory leniency from figures like SEC Commissioner Mark Uyeda
- Legislative backing that could drive bullish momentum
Additionally, the U.S. nonfarm payrolls (NFP) report for February will be closely watched. Economists expect job creation to rise to 160K from January’s 143K, while the unemployment rate is predicted to hold at 4%. If the report falls short of expectations, it could bolster hopes for Federal Reserve rate cuts, potentially benefiting risk assets like Bitcoin.
Federal Reserve’s Stance and Trump’s Impact
Market analysts are also evaluating how Trump’s economic policies, particularly tariffs, may impact inflation and Federal Reserve decisions. Markus Thielen, founder of 10x Research, suggests that the Fed may maintain a cautious stance due to inflationary concerns tied to Trump’s trade policies.
“The interest rate market has shifted expectations, now anticipating three rate cuts this year instead of just one. However, this outlook may be overly optimistic, as the Fed will likely prioritize monitoring Trump’s impact on inflation. This process could take months, if not quarters, to fully assess,” Thielen noted.
Conclusion
While traders express concern over Bitcoin, Ether, and Solana’s short-term risks, XRP continues to defy bearish sentiment. The upcoming crypto summit and economic data will be key drivers of market direction. As the regulatory landscape evolves, traders must remain vigilant and adapt to shifting trends in the crypto space.
