ETH ETF Launches with Lackluster Performance: Will History Repeat with a Price Drop?

Market Overview

Spot Ethereum ETFs began trading on Tuesday, yet despite regulatory approval, ETH's price failed to surge significantly. The put/call ratio suggests potential downside risks, while historical trends indicate new crypto product launches often trigger price corrections.

Bearish Sentiment Indicators

• Put/Call Ratio: Deribit data shows a 1.19 ratio for August 9th expiry, signaling higher demand for put options (bearish bets).
• Price Action: ETH underperformed compared to other cryptocurrencies, with muted gains post-ETF approval.

Recommended Strategy: Bear Put Butterfly

A Bear Put Butterfly is a three-part options strategy designed to profit from downward price movements while limiting losses.

Trade Structure

| Position | Execution Price | Premium |
|-----------------------------------|-----------------|----------|
| Buy 1x ETH-09AUG24-$3,400-P | $3,400 | $144.5 |
| Sell 2x ETH-09AUG24-$3,300-P | $3,300 | $105 |
| Buy 1x ETH-09AUG24-$3,200-P | $3,200 | $75 |

Target: ETH at $3,300 upon expiry (August 9).

Profit/Loss Breakdown

• Max Profit: $90.5 per ETH (achieved if ETH closes at $3,300).
• Max Loss: $9.5 per ETH (if ETH moves above $3,400 or below $3,200).

Why This Trade?

1. Historical Precedent: Crypto products (e.g., Bitcoin futures, Coinbase IPO) often see post-launch price declines.
2. Technical Analysis: ETH faces resistance near current levels, with $3,300 acting as a critical support zone (see chart reference in original article).
3. Risk-Reward: Limited downside ($9.5) vs. high upside potential ($90.5).

Execution Guide (Deribit Platform)

1. Navigate to the "Strategies" tab → COMBO Book.
2. Create a custom COMBO with the above positions.
3. Submit the order via RFQ to the COMBO list.
4. Monitor and execute once filled.

👉 Learn advanced ETH trading strategies

FAQs

Q: Why did ETH fail to rally post-ETF approval?

A: Market anticipation since May 2024 likely priced in the news, leading to a "buy the rumor, sell the fact" scenario.

Q: What’s the worst-case outcome for this trade?

A: A loss of $9.5 per ETH if ETH surges above $3,400 or crashes below $3,200.

Q: Are there alternatives to this strategy?

A: Yes—bear spreads or outright put purchases, though with higher risk or cost.

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Disclaimer: This content is for educational purposes only. Trading involves risks.