Crypto markets show caution with major put skews in Bitcoin and Ether

Crypto markets are feeling super cautious today, with a clear lean towards puts in both Bitcoin and Ether options. Nvidia’s impressive earnings report last night set off a classic “sell the news” reaction, dragging Bitcoin back down to $59,000. It also left Ethereum stuck around $2,500. 

That hype from Nvidia? It’s over, and now we’re left with a market that’s jittery and not in the mood for risk. Overnight, the market saw front-end volatility spike as Bitcoin and Ether spot prices dropped. 

Those vols have cooled off fast after Nvidia’s earnings, down about 10 points from their peak. According to QCP analysts, the market is still skewed towards puts for both BTC and ETH, at least until October. This means traders are bracing for more downside, not betting on a big recovery. 

With the U.S. non-farm payroll report coming next week, we might see even more volatility drop as markets settle into what’s looking like a prolonged period of waiting for the Fed to make a move.

What’s moving the market now?

Tonight’s U.S. GDP report might be a snooze fest for crypto unless it has new information about the U.S. economy slowing down.

No one is expecting fireworks. And with no real catalysts on the horizon, it looks like Bitcoin and Ether will continue to chop sideways as we head into September. 

Markets have taken Fed chair Jerome Powell’s recent speech as a hint that up to four 25-basis point cuts could be on the table by the end of the year, and maybe eight by September 2025. 

Nansen analysts believe that’s the Fed “put” coming back into play. While equity markets may favor such a resolution, crypto is still feeling the heat.

The Bank of Japan is taking a different approach, gradually hiking rates while keeping an eye on market stability. Other major central banks seem to be on an easing path or are staying put for now, which could explain why some investors are still holding on to their crypto positions.

On the political front, the U.S. presidential race is adding more uncertainty to the mix. Kamala Harris is now leading Donald Trump by a small margin, and her shift from left-wing to more centrist policies is creating a lot of questions about future economic policies.

Crypto traders are particularly interested in what Kamala might do about corporate taxes, which could swing market sentiment. If she wins and decides to roll back the favorable corporate tax cuts from the Trump era, we could see some turbulence in both equities and crypto markets. 

Corporate buybacks are kicking off soon, and it is expected to add around $5 billion in equity demand, according to Goldman Sachs. For crypto, the indicators are showing a mixed bag—Bitcoin’s call-put spread is leaning risk-on, but price momentum is flat. 

What’s happening on-chain? The stablecoin market cap is inching up, and cross-chain fees have seen a bump, mostly thanks to Tron and Binance. Overall, fees have not bounced back to their March highs. 

So, while asset prices are not crashing, they’re not exactly booming either. Aave, for example, is up 25% since mid-August, outperforming Bitcoin by 18 percentage points in the same period.

Other top movers include Helium and Tron. Still, the overall sentiment remains mixed. Crypto investors are playing it safe, waiting to see how all these moving parts will play out in the coming weeks.

So, are we still in a bull market? Some indicators suggest we haven’t hit the typical peak euphoria seen in past cycles. Meanwhile, other indicators warn this could be a different kind of market altogether, one dominated by a few big players like Bitcoin, Solana, and a couple of meme coins.