ETH Reddit Mentions | ChartExchange

I trade crypto perps on the side, mostly to hedge my spot bag and occasionally catch a clean setup. The thing that has been bugging me lately is how the option market and the perp market are reading the same BTC chart in completely opposite ways.
Option open interest across the whole market is sitting somewhere in the mid 30s in terms of billion notional. The number itself does not tell you much, the skew does. CME put positioning has been heavier than calls since November, and a big chunk of the outstanding calls are struck above 72k, which means they are deep out of the money with spot grinding around the low 60s. So the call side is basically dead weight and the put side keeps building. People buying puts in this kind of tape are not doing it for fun, that is institutional hedging. They are paying premium to protect against a move down.
Then you look at the perp side and it is a different story. Retail funding on BTC has not even gone that negative through this whole grind. Open interest is sticky, leverage is still on, and the long short ratio on most retail heavy venues is leaning long. I check funding on Coinglass and the BYDFi prints mostly say the same thing, funding keeps trying to flip positive on every little bounce even though price is not holding any of them.
So the people with actual size are buying downside protection and the people trading size on leverage are still trying to pick a bottom. I am not saying institutions are automatically right, they were heavy on puts earlier this year too and got squeezed when BTC ripped back through 70k in February. But the gap between the two markets right now is wide enough that it means something. Usually when perp funding stays stubbornly positive while option skew goes defensive it means the leveraged long side is crowded relative to who is actually willing to hold spot. That is the setup where a clean wick down triggers cascading liquidations because the bid side is thin and everyone is long.
What I am doing about it is keeping perp size small and only shorting into strength, not adding to longs on dips until funding actually resets. I caught a small ETH perp short into the bounce last week, covered when funding finally flipped negative for a session, nothing big but it paid for dinner. If funding flips hard negative and stays there for a few sessions that is a different signal, it means the leveraged side finally gave up and the downside crowded trade has cleared. We are not there yet.
The trade I do not want to take is the obvious one, longing because it feels cheap. Cheap is a feeling, not a reason to risk money. The option market is telling you the tail risk is real and the perp market is telling you a lot of people are ignoring it.

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