and the sunny one stand out as the top cryptocurrencies with a key sentiment indicator showing bullish momentum, while their bitcoin peers and ether stay trapped in the dark.
This key sentiment indicator, known as 25 delta risk reversal, is actually an options strategy that involves simultaneously purchasing a 25 delta call option and selling a 25 delta put option, or vice versa. ’25-delta’ refers to options that are moderately out-of-the-money, meaning their strike prices are far from the current market price and are therefore relatively cheap.
This strategy reveals market sentiment by comparing the implied volatilities of these bullish calls and puts, which offer downside protection. A positive risk reversal indicates 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.
At the time of writing, XRP and SOL risk reversals were positive across all available maturities (October 31, November 28, and December 26) on Deribit, indicating a bias for calls, according to data source Amberdata. A call buyer is implicitly bullish on the market, while a put buyer seeks to hedge their portfolio or profit from an expected price drop.
The renewed optimism follows a surge in demand for puts following the October 10 crash, which saw the price of XRP fall as low as $1.77 from $2.80 on some exchanges. At the time of writing, XRP changed hands at $2.33, according to data from CoinDesk. SOL fell to $188 from $220 on the same day and has remained under pressure since, as has XRP.
The constructive sentiment contrasts sharply with bitcoin risk reversals, showing that the trade is at a premium relative to calls across all time frames, through the September 2026 expiry. Clearly, BTC traders remain concerned about downside risks.
In the case of ETH, the bearish trend prevails until options expiring in December, followed by bullish prices in options expiring later.
Risk reversals are widely followed to gauge market sentiment; However, it is worth noting that while generally reliable, risk reversals 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.
In addition to the persistent selling bias in Bitcoin options, especially at quarterly and longer-term expirations, this can be attributed in part to the widespread practice of call option overwriting, where traders sell higher-strike call options against their long spot holdings to generate additional yield. In other words, the selling bias reflects return-generating efforts rather than overtly bearish market sentiment.
Criminals show a neutral feeling
While XRP options have turned bullish, XRP perpetual futures show a more balanced market, in line with neutral funding rates and sentiment seen in BTC, SOL, and ETH perpetual futures.
At press time, annualized perpetual funding rates (charged every eight hours) were hovering near zero, indicating neutral sentiment, according to data source Velo. This moderate demand for leveraged bullish exposure in these top cryptocurrencies is typical of traders struggling to regain confidence after a price drop.
The recent market crash wiped out $20 billion worth of leveraged futures bets, causing massive wealth destruction.
Perpetual futures are derivative contracts that allow traders to speculate on the price of an asset, such as cryptocurrency, with no 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 spot price of the underlying asset.
When funding rates are positive, it means that perpetual futures are trading at a premium to the spot price, indicating greater demand for leveraged bullish exposure. Negative rates suggest the opposite.
