Ethereum
Is Ethereum Ready for a Major Rally? Options traders bet big on targets above $3,600 for June
Ethereum (ETH) options for June show strong interest in higher strike prices, focusing on levels above $3,600.
Data of Deribit reveals a concentrated bet among traders on calls exceeding this price, indicating bullish sentiment towards Ethereum’s near-term trajectory. The most advantageous strike price among these optimistic bets is the ambitious $6,500.
The options market is bullish on Ethereum
Notably, 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 price specified exercise date before the expiration date.
A call option is usually purchased by traders who believe the asset price increase, allowing them to buy at a lower rate and potentially sell at a higher market price. Conversely, put options are favored by those who anticipate a decline in the price of the asset, aiming to sell at the current rate and buy back at a lower value.
Currently, the Ethereum options market is rocking strongly towards callsaggregate open interest – representing the total number of contract options outstanding – showing a preference for higher strike prices.
This concentration of calls, primarily above the $3,600 mark, suggests that a significant market segment is positioning for Ethereum to reach higher levels by the end of June.
According to Deribit data, approximately 622,636 Ethereum call contracts are expected to expire by the end of June, representing a notional value of over $1.8 billion. Such important positioning underlines the market’s confidence in the potential growth of Ethereum.
The data further shows that the largest open interest is concentrated around the $6,500 strike price, 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’s price approaches or exceeds these exercise levels.
Despite the optimism inherent in these options, Ethereum is currently going through a slight slowdown. It fell 5.4% over the past week and 2.2% over the past 24 hours, putting it below $2,900. This drop puts even more emphasis on upcoming market catalysts that could significantly influence the price of ETH.
Regulatory decisions and technical indicators: a double influence on the trajectory of ETH
An important upcoming event is the Decision by the United States Securities and Exchange Commission (SEC) on several applications for Ethereum-based exchange-traded funds (ETFs), which are due by May 25.
The move is crucial because its approval could trigger a wave of institutional investment in Ethereum, potentially catapulting its price. Conversely, a rejection could dampen bullish sentiment and lead to further pullbacks.
From a technical analysis perspective, the signs are pointing to a possible rebound. The “bullish number pattern”, identified by analyst Titan Of Crypto, suggests that Ethereum could be at a turning point. Currently, Ethereum is at the 38.2% Fibonacci retracement level, a key support area in many bull markets.
This level has historically served as a launching pad for upward price movements, hinting that Ethereum could be gearing up for a significant move higher.
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#Altcoins #Ethereum Bounce incoming.
The bullish crypto pattern played out perfectly and all goals were achieved 🎯.#ETH is currently at the 38.2% Fibonacci retracement level, also known as the “1st stop”. In a bull market, this level is maintained.
I expect a rebound from this level. 🚀 pic.twitter.com/o9e6VLEREz
– Crypto Titan (@Washigorira) May 12, 2024
Featured image from Unsplash, chart from TradingView