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This shift has been flagged by the downwards move in the Block Scholes Risk Appetite Index for BTC and ETH.
This has been in sharp contrast to recent moves in US equities, which have traded to record highs over the same period.
Both indexes had been bolstered by optimism around artificial intelligence, until the mid-week pullback.
READ MORE (published Wed, June 3): Here's why US stocks are hitting so many new record highs, even outperforming Bitcoin.
On the other hand, after falling below $70K at the start of the week, Bitcoin has continued its selloff, falling to a 4-month low around $61.3K.
Ethereum also hit a 13-month trough - lowest since April 2025!
READ MORE (published Tue, June 2): Here's why Bitcoin is sinking
While in general risk-on assets have been whipsawed by geopolitical headlines as the US-Iran conflict enters its fourth month, US equities appear to have weathered that storm far better than crypto, with factors such as strong corporate earnings and the boom in AI infrastructure investment to support prices.
In contrast, idiosyncratic factors for BTC and ETH have played a role in their comparatively poor YTD performance. Since 15 May 2026, spot Bitcoin ETFs have seen 13 consecutive sessions of outflows, with more than $4.4B in cumulative redemptions.
That marks their longest losing streak since the products first debuted back in January 2024.
Additionally, the largest Bitcoin digital asset treasury, Strategy, disclosed its first Bitcoin sale since late 2022, offloading 32 BTC for approximately $2.5M.
While only a fraction of the firm's 843,706 BTC holdings, the sale marked a stark departure from Michael Saylor's long-held mantra: "Sell a kidney if you must, but keep the Bitcoin."
For Ethereum, the outflow streak in spot ETFs began even earlier than that in Bitcoin spot ETFs, with the products being net sellers since May 11, 2026.
The most recent leg of BTC’s selloff towards $60K (more than 50% below its all-time high), has had its clearest impact in crypto options markets.
At-the-money implied volatility, a forward-looking view of the volatility traders expect, has nearly doubled from 28%, the year-to-date low it traded at only last week, to 60%.
That’s now resulted in an inverted term structure of volatility.
DECODE: An inverted term structure of volatility means short-dated options trade with a higher implied volatility than longer-dated contracts.
In other words, the risk premium priced in by BTC options has quickly moved from its lowest level all year, to now signaling elevated demand for downside protection in the near-term.
That same term structure inversion can also be seen in ETH, where short-dated IV has jumped from a YTD low of 36% to 67%.
The jump higher in implied volatility has also been accompanied by an aggressive skew in favor of out-of-the-money put options.
Put-call skew for 7-day BTC and ETH options is currently trading around -14% and -12%, a sharp move from the -3% and -4% level in late May – a clear sign of demand from traders to pay much higher premiums for downside protection.
That increased demand for put options is not just limited to short-dated options either, rather in line with the drop in spot price, put-call skew has increased in favor of puts across maturities: 7-, 14-, 30-, and 90-day.
DISCLAIMER:This article is provided for general information and reflects the author’s views only. It does not constitute investment advice, nor an offer or solicitation to buy or sell any financial instruments or digital assets. Your ability to access or use any products or services mentioned may be subject to the laws and regulatory requirements of your jurisdiction.