Ethereum (ETH) options for June show a clear interest in higher strike prices, with an emphasis on levels above $3,600.
Facts from Deribit reveals a concentrated bet among traders on calls that exceed this price, indicating bullish sentiment towards Ethereum’s short-term trajectory. The most favored strike price among these bullish bets is an ambitious $6,500.
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Options market bullish on Ethereum
Specifically, options are contracts that give traders the right, but not the obligation, to buy (in the case of calls) or sell (in the case of puts) the underlying asset at a specified strike price before expiration.
A call option is typically purchased by traders who believe that the value of the asset will increase, allowing them to buy at a lower price and possibly sell at a higher market price. Conversely, put options are preferred by those who anticipate a decline in the price of the asset, with the aim of selling at the current price and buying back at a lower value.
Currently, the Ethereum options market is heavily skewed towards calls, with total open interest – representing the total number of contract options outstanding – showing a preference for higher strike prices.
This concentration of calls, mainly above $3,600, suggests that a significant market segment is positioning itself for Ethereum to rise to higher levels by the end of June.
According to Deribit data, approximately 622,636 Ethereum call contracts are set to expire at the end of June, representing a notional value of more than $1.8 billion. Such substantial positioning underlines the market’s confidence in Ethereum’s potential revival.
Data further shows that the most substantial open interest is clustered around the strike price of $6,500, with a notional value of $193 million.
This concentration reflects traders’ optimism and supports Ethereum’s market price, especially if these options are exercised as the asset price approaches or exceeds these strike levels.
Despite the optimism inherent in these options, Ethereum is currently experiencing a slight downturn. The stock has fallen 5.4% in the past week and 2.2% in the past 24 hours, leaving it below $2,900. This decline puts even more emphasis on emerging market catalysts that could significantly impact the price of ETH.
Regulatory decisions and technical indicators: a double influence on ETH’s path
A major upcoming event is the U.S. Securities and Exchange Commission’s (SEC) decision on several applications for Ethereum-based Exchange-Traded Funds (ETFs), due by May 25.
This decision is crucial because approval could usher in a wave of institutional investment in Ethereum, catapulting its price. Conversely, a rejection could dampen bullish sentiment and lead to further pullbacks.
From a technical analysis perspective, the signs point to a possible recovery. The ‘Bullish Cypher Pattern’ identified by analyst Titan Of Crypto suggests that Ethereum could be at an inflection point. Currently, Ethereum is at the 38.2% Fibonacci retracement level, a key support zone in many bull markets.
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This level has historically acted as a springboard for upward price movements, indicating that Ethereum could be preparing for a significant rise.
#Altcoins #Ethereum Bounce incoming.
The Bullish Cypher pattern went perfectly and all goals were achieved 🎯.#ETH is currently at the 38.2% Fibonacci retrace level, also called “1st stop”. In a bull market this level is maintained.
I expect a jump from this level. 🚀 pic.twitter.com/o9e6VLERez
— Titan of Crypto (@Washigorira) May 12, 2024
Featured image from Unsplash, chart from TradingView