And Solana Stand as the main cryptocurrencies with a major sentiment gauge showing bullish momentum, while their peers bitcoin and ether Stay stuck in the dark.
This basic measure of sentiment, known as the 25-delta risk reversal, is actually an options strategy that involves simultaneously buying a 25-delta call and selling a 25-delta put, or vice versa. ’25-Delta’ refers to options that are moderately out-of-the-money, which means their strike prices are far from the current market price and therefore relatively cheap.
This strategy reflects market sentiment by comparing the implied volatilities of call options with bullish call options and put options, which offer downside protection. A positive return on risk indicates traders are paying a premium for putting calls, signaling bullish expectations, while a negative reading reflects bias. Deribit is the world’s largest crypto options exchange, accounting for more than 80% of crypto options activity.
As of writing, XRP and SOL Risk Reversals are positive on all available expirations – Oct. 31, Nov. 28, Dec. 26 – in deribit, indicating a bias for calls, according to the data source amberdata. A call buyer is unconditionally 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 placement following the October 10 crash that saw the price of XRP tank below $1.77 from $2.80 on several 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 like XRP.
The constructive sentiment contrasts with Bitcoin’s risk returns showing it trades at a premium relative to calls on all puts, until expiration in September 2026. Clearly, BTC traders remain concerned about downside risks.
In the case of ETH, bearishness remains in December expiration options, followed by bullish pricing in subsequent options expirations.
Risk returns are widely monitored to gauge market sentiment; However, it is worth noting that while generally reliable, the risk returns tied to XRP and Sol may be less accurate indicators due to the relatively smaller market size, volume, and open interest compared to the billions seen in the Bitcoin and ether options markets.
Apart from the continued placing bias in bitcoin options, especially with quarterly and longer expirations, this can be partially attributed to the widespread practice of call overwriting, where traders sell call options that have a higher strike against their long spot holdings to generate additional yield. In other words, placement bias reflects yield generation efforts rather than clear market sentiment.
Perps flash neutral sentiment
While XRP options have flipped bullish, Perpetual futures for XRP show a more balanced market, consistent with the neutral funding rates and sentiment seen in perpetual futures for BTC, SOL and ETH.
At press time, Perpetual’s annual funding rates (billed every eight hours) approached near zero, indicating a neutral sentiment, according to Data Source Velo. The underlying demand for leveraged bullish exposure in these major cryptocurrencies is typically traders struggling to regain confidence following a price crash.
The recent market crash was liquid leveraged futures bets worth $ 20 billioncausing massive destruction of wealth.
Perpetual futures are derivative contracts that allow traders to speculate on the price of an asset, such as 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 spot price of the asset.
When funding rates are positive, it means that perpetual futures are trading at a premium to the spot price, signaling increased demand for leveraged bullish exposure. Negative rates suggest otherwise.
