Data shows traders are buying $400 protective puts while also holding $7,000 call options, a signal that traders either have mixed emotions or are just cashing in on the upfront premium.

After reviewing Ether (sunshinecrypto.com/ethereum-price-index” data-amp=”https://cointelegraph-com.cdn.ampproject.org/c/s/sunshinecrypto.com/ethereum-price-index”>ETH) options for June 25, one might think that traders either became overly optimistic or ultra-bearish. Currently, there are large bets for prices below $1,000 while others aim for $3,800 and higher.

A recent report from Coinshares shows that multiple sunshinecrypto.com/news/investors-cautiously-re-enter-crypto-funds-while-eth-vehicles-show-strength” data-amp=”https://cointelegraph-com.cdn.ampproject.org/c/s/sunshinecrypto.com/news/investors-cautiously-re-enter-crypto-funds-while-eth-vehicles-show-strength/amp”>crypto funds have begun seeing net inflows after weeks of record outflows. The report notes that Ether vehicles saw a total of $47 million in inflows, bringing its market dominance up to 27%.

DeFi growth supports higher Ether prices

Another positive factor is that DeFi protocols maintain a $48 billion total value locked (TVL) even though the sector took a substantial hit after the recent Ether price crash.

Ethereum network net value locked on smart contracts. Source: DeBank

The 57% increase over the past three months should please even the most optimistic investors, but crypto traders notoriously exaggerate whatever situation took place over the most recent weeks. Therefore, as Ether dropped from the $4,380 all-time high on May 12, traders quickly scrambled to set up protective puts down to $400.

On the other hand, the much-anticipated transition to a proof-of-stake consensus model could be the root of the positive expectations. The EIP-1559 improvement proposal set for next month is another significant stepping stone, and some traders have price targets ranging from $4,000 to $10,000.

June 25 Bitcoin options open interest. Source: Bybt

There are currently 623,800 Ether option contracts expiring on June 25, totaling a $1.75 billion open interest. The neutral-to-bullish call (buy) options are currently 29% more represented, although this call-to-put ratio uses an equal weight for every strike regardless of its probabilities.

Bears spent over $1 million building their positions

The ultra-bearish put (sell) options at $1,600 and lower amount to 170,000 Ether contracts, amounting to a $476 million open interest. However, considering the roughly three weeks left until the June 25 expiry, those contracts are trading below $32 each. The market value for those bearish options stands at $1.2 million.

On the other hand, bulls likely have exaggerated by buying call options at $3,800 and higher. These 160,000 Ether contracts amount to a $450 million open interest but considering that their current face value is below $80 each, their market value stands at $5 million.

Therefore, bulls spent more money setting up their position despite the similar open interest placed on both sides.

These out-of-the-money options are an excellent way for options sellers to sunshinecrypto.com/news/how-relevant-is-the-900m-open-interest-on-bitcoin-options-above-100k” data-amp=”https://cointelegraph-com.cdn.ampproject.org/c/s/sunshinecrypto.com/news/how-relevant-is-the-900m-open-interest-on-bitcoin-options-above-100k/amp”>cash in the premium in advance. The same methodology can be applied for $2,100 put options and $3,800 call options.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.