Recent developments in the cryptocurrency market indicate strong bullish sentiment among ethereum traders, particularly in the options market.
Amid growing anticipation for potential ethereum spot exchange-traded fund (ETF) approvals, there has been a notable shift in options pricing, with ethereum call options becoming more expensive than put options at all maturities.
This price pattern suggests that the market is optimistic about ethereum's price prospects. In particular, a call option gives the holder the right, but not the obligation, to purchase an asset at a specific price within a specific time period.
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This type of option is usually purchased by traders who believe that the price of the asset will increase. In contrast, a put option gives the holder the right to sell the asset at a predetermined price and is often used as protection against a drop in the asset's price.
Market Indicators Point to Bullish ethereum
Luuk Strijers, CEO of Deribit, highlighted this trend in his communication with The Block. He noted that “the buying and selling bias is negative across all expirations and increases further after the end-June expiration, a fairly bullish sign.”
Additionally, the basis, or annualized premium of the futures price over the spot price, has risen to around 14%, further bolstering the bullish outlook.
The analysis reveals that traders prefer to purchase call options at a premium compared to put options, particularly those that expire at the end of June or later.
This pattern is a sign of a bull market, indicating that traders are not as interested in securing protection against potential price drops as they are in anticipating that the value of ethereum will continue to rise.
Meanwhile, after the US Securities and Exchange Commission (SEC) unexpectedly requested changes to filings, optimism has resurfaced regarding the potential approval of ethereum spot ETFs.
This optimism has translated into significant market activity, with Deribit experiencing almost unprecedented trading volumes. Strijers commented: “We recorded an almost unprecedented trading volume of $12.5 billion nominal in the last 24 hours.”
This increase in trading volume and market interest reflects how traders and investors are positioning themselves to capitalize on the potential approval of ethereum spot ETFs.
According eth” target=”_blank” rel=”nofollow”>data of Deribit, more than $480,000 will expire at the end of this month, with a face value of more than $1.7 billion.
The data further reveals that the strike price reaches $7,000, with a total intrinsic value of $1.452 million, indicating that many ethereum options traders are very bullish on eth.
eth Price Performance and Forecast
Meanwhile, ethereum is experiencing a slight pullback, down 2.4% in the last 24 hours, trading at $3,690. Despite this setback, the asset has maintained a strong bullish trend, rising almost 25% in the last seven days.
As market anticipation around spot eth ETFs grows, a prominent crypto analyst has twitter.com/AltcoinSherpa/status/1793163914689036377?ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow”>He suggested a possible price move for ethereum, indicating a brief pullback around $4,000 before hitting new all-time highs.
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According to the analyst, while there may be some obstacles, reaching an all-time high of $5,000 seems “inevitable” for ethereum.
<blockquote class="twitter-tweet”>
twitter.com/search?q=%24ETH&src=ctag&ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow”>$eth: I think we will briefly pull back around 4k, but this will certainly surpass all-time highs if the ETF is approved. This still looks like a free trade for eth to go to ATH which is at 5k. There might be some bumps in the road, but it seems inevitable.
I have SOL and eth and no… pic.twitter.com/IznlJ0RAyl
—Altcoin Sherpa (@AltcoinSherpa) twitter.com/AltcoinSherpa/status/1793163914689036377?ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow”>May 22, 2024
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