Ethereum Bullish Turn: Analyst Highlight Positive Bias In ETH Options Across All Expiries
May 22 2024 - 4:00PM
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Recent developments in the crypto market indicate a strong bullish
sentiment among Ethereum traders, particularly in the options
market. Amid the growing anticipation for potential approvals of
spot Ethereum exchange-traded funds (ETFs), there has been a
noticeable shift in option pricing, with Ethereum call options
becoming more expensive than put options across all expiries. This
pricing pattern suggests the market is optimistic about Ethereum’s
price prospects. Notably, A call option gives the holder the right,
but not the obligation, to buy an asset at a specified price within
a specific time frame. Related Reading: Is Ethereum Set For A Major
Rally? Options Traders Bet Big On $3,600+ Targets For June This
option type is typically purchased by traders who believe the
asset’s price will increase. Conversely, a put option provides the
holder the right to sell the asset at a predetermined price and is
often used as protection against a decline in the asset’s price.
Market Indicators Point To A Bullish Ethereum Luuk Strijers, CEO of
Deribit, highlighted this trend in his communication with The
Block. He noted that the “put minus call skew is negative across
all expiries and increasing further beyond the end-of-June expiry,
a quite bullish signal.” Additionally, the basis, or the annualized
premium of the futures price over the spot price, has increased to
around 14%, further reinforcing the bullish outlook. The analysis
reveals that traders prefer to purchase call options at a premium
compared to put options, particularly for those set to expire at
the end of June and later. This pattern is a sign of a bullish
market, indicating that traders are not as interested in securing
protection against potential price drops as they are in
anticipating that Ethereum’s value will keep climbing. Meanwhile,
after the US Securities and Exchange Commission (SEC) unexpectedly
asked for changes in filings, there has been a resurgence in
optimism regarding the possible approval of spot Ethereum ETFs.
This optimism has translated into significant market activity, with
Deribit experiencing nearly unprecedented trading volumes. Strijers
remarked, “We recorded an almost unprecedented trading volume of
$12.5 billion notional over the last 24 hours.” This surge in
trading volume and market interest reflects how traders and
investors position themselves to capitalize on the potential
approval of spot Ethereum ETFs. According to data from Deribit,
over $480,000 calls will expire by the end of this month, with a
notional value of more than $1.7 billion. The data further reveals
that the strike price reaches as high as $7,000, with a total
intrinsic value of $1.452 billion, indicating that many Ethereum
options traders are highly bullish on ETH. ETH Price Performance
And Forecast Meanwhile, Ethereum is undergoing slight retracement,
down by 2.4% in the past 24 hours, with a trading price of $3,690.
Despite this pullback, the asset has maintained a strong uptrend,
rising nearly 25% over the past seven days. As the market’s
anticipation around spot ETH ETFs grows, a prominent crypto analyst
has suggested a potential price movement for Ethereum, indicating a
brief pullback at around $4,000 before surging to new all-time
highs. Related Reading: Ethereum Nears Crucial Breakout: Could
$4,000 Be The Next Move? According to the analyst, while there
might be some bumps, reaching an all-time high of $5,000 seems
“inevitable” for Ethereum. $ETH: I think we pullback briefly around
4k but this certainly breaks all time highs if/when ETF gets
approved. This still seems like a free trade for ETH going to ATH,
which is at 5k. Could be some bumps along the way but it seems
inevitable. I have both SOL and ETH and not…
pic.twitter.com/IznlJ0RAyl — Altcoin Sherpa (@AltcoinSherpa) May
22, 2024 Featured image created with DALL·E, Chart from TradingView
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