and Solana’s stand out as the leading cryptocurrency showing bullish momentum with a key sentiment gauge, while their counterpart, Bitcoin and ether To be trapped in darkness.
This key sentiment gauge, known as 25-delta risk reversal, is actually an options strategy that involves the simultaneous purchase of a 25-delta call and the sale of a 25-delta put, or vice versa. ’25-delta’ refers to options that are moderately out of the money, meaning that their strike prices are far from the current market price and are therefore relatively cheap.
This strategy reveals market sentiment by comparing the implied volatility of these bullish call options and put options, which provide downside protection. A positive risk reversal signals that traders are paying a premium for calls over puts, indicating bullish expectations, while a negative reading reflects a bearish bias. Deribit is the world’s largest crypto options exchange, accounting for over 80% of crypto options activity.
According to data source Amberdata, at the time of writing, XRP and SOL risk reversals for all available expirations – October 31, November 28, December 26 – were positive on Deribit, indicating a bias for calls. A call buyer is obviously looking for a market uptrend, while a put buyer is looking to protect his portfolio from an expected price decline or make a profit from it.
The renewed rally comes after an increase in demand for puts following the October 10 crash, which sent the price of XRP down from $2.80 to $1.77 on some exchanges. At the time of writing, XRP changed hands at $2.33, according to CoinDesk data. SOL fell from $220 to $188 on the same day and has since been under pressure, similar to XRP.
The constructive sentiment is in sharp contrast to Bitcoin’s risk reversal, which shows that all durations trade at a premium relative to calls, up to September 2026 expiration. Clearly, BTC traders remain concerned about downside risks.
In the case of ETH, December expiration options remain bearish, followed by bullish pricing in subsequent expiration options.
Risk changes are widely tracked to gauge market sentiment; However, it is worth noting that while generally reliable, the risk reversal associated with XRP and SOL may be a less accurate indicator due to the relatively small market size, volume, and open interest compared to the billions seen in the Bitcoin and Ether options markets.
In addition to the persistent put bias in Bitcoin options, especially in quarterly and longer term expirations, this can be partially 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 creation efforts rather than purely bearish market sentiment.
Purpose reflects neutral sentiment
While XRP options have been bullish, perpetual futures for
According to data source Velo, at press time, annual perpetual funding rates (charged every eight hours) were near zero, indicating a neutral sentiment. This low demand for leveraged bullish performance in these leading cryptocurrencies is typical of traders struggling to regain confidence after a price crash.
The recent market crash wiped out $20 billion of leveraged futures bets, causing massive money losses.
Perpetual futures are derivative contracts that allow traders to speculate on the price of an asset without an expiration date, such as cryptocurrencies. 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 spot price of the underlying asset.
When funding rates are positive, it means perpetual futures are trading at a premium to the spot price, indicating increased demand for leveraged bullish exposures. Negative rates suggest otherwise.