An increase in the number of outstanding puts compared to calls in bitcoin options open interest could be a bearish omen ahead of Friday's expiry.

Deribit Chief Commercial Officer Luuk Strijers said the put-call ratio for bitcoin options across all expiries currently stands at 0.44.

"Focusing on tomorrow's expiry, the ratio adjusts to 0.52, indicating a higher number of puts compared to calls," Strijers told The Block. "This suggests a bearish sentiment for this month's bitcoin options expiry compared to the general trend in open contracts."

The analyst added that the ratio suggests that the market expected a short-term downside for bitcoin, and investors have used puts to hedge.

"However, they see the longer-term as having relatively more upside," he added.

Ether options skew is also bearish

Strijers said that the call-put options skew for longer-term 30- and 60-day ether options remains slightly negative. He added that it is, however, close to zero.

"This indicates that puts are more expensive relative to calls, signaling a mildly bearish outlook for these longer-dated expiries," Strijers added.

Options are derivative contracts that give a trader the right but not the obligation to buy or sell the underlying asset at a predetermined price on or before a specific date. A call option gives the right to buy, and a put offers the right to sell. It is assumed that a trader who buys put options is implicitly bearish on the market, while a call buyer is bullish.