Ethereum Bullish Turn: Analyst Highlight Positive Bias In ETH Options Across All Expiries

Samuel Edyme

1 year ago

3 mins read

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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.

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.

Ethereum Open Interest By Strike Price. | Source: Deribit

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.

Ethereum (ETH) price chart on TradingView — ETH price is moving upward on the 4-hour chart. Source: ETH/USDT on TradingView.com

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.

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

Samuel Edyme

Meet Samuel Edyme, Nickname - HIM-buktu. A web3 content writer, journalist, and aspiring trader, Edyme is as versatile as they come. With a knack for words and a nose for trends, he has penned pieces for numerous industry player, including AMBCrypto, Blockchain.News, and Blockchain Reporter, among others.

Edyme’s foray into the crypto universe is nothing short of cinematic. His journey began not with a triumphant investment, but with a scam. Yes, a Ponzi scheme that used crypto as payment roped him in. Rather than retreating, he emerged wiser and more determined, channeling his experience into over three years of insightful market analysis.

Before becoming the voice of reason in the crypto space, Edyme was the quintessential crypto degen. He aped into anything that promised a quick buck, anything ape-able, learning the ropes the hard way. These hands-on experience through major market events—like the Terra Luna crash, the wave of bankruptcies in crypto firms, the notorious FTX collapse, and even CZ’s arrest—has honed his keen sense of market dynamics.

When he isn’t crafting engaging crypto content, you’ll find Edyme backtesting charts, studying both forex and synthetic indices. His dedication to mastering the art of trading is as relentless as his pursuit of the next big story. Away from his screens, he can be found in the gym, airpods in, working out and listening to his favorite artist, NF. Or maybe he’s catching some Z’s or scrolling through Elon Musk’s very own X platform—(oops, another screen activity, my bad…)

Well, being an introvert, Edyme thrives in the digital realm, preferring online interaction over offline encounters—(don’t judge, that’s just how he is built). His determination is quite unwavering to be honest, and he embodies the philosophy of continuous improvement, or “kaizen,” striving to be 1% better every day. His mantras, “God knows best” and “Everything is still on track,” reflect his resilient outlook and how he lives his life.

In a nutshell, Samuel Edyme was born efficient, driven by ambition, and perhaps a touch fierce. He’s neither artistic nor unrealistic, and certainly not chauvinistic. Think of him as Bruce Willis in a train wreck—unflappable. Edyme is like trading in your car for a jet—bold. He’s the guy who’d ask his boss for a pay cut just to prove a point—(uhhh…). He is like watching your kid take his first steps. Imagine Bill Gates struggling with rent—okay, maybe that’s a stretch, but you get the idea, yeah. Unbelievable? Yes. Inconceivable? Perhaps.

Edyme sees himself as a fairly reasonable guy, albeit a bit stubborn. Normal to you is not to him. He is not the one to take the easy road, and why would he? That’s just not the way he roll. He has these favorite lyrics from NF’s “Clouds” that resonate deeply with him: “What you think's probably unfeasible, I've done already a hundredfold.”

PS—Edyme is HIM. HIM-buktu. Him-mulation. Him-Kardashian. Himon and Pumba. He even had his DNA tested, and guess what? He’s 100% Him-alayan. Screw it, he ate the opp.

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