Ethereum
What Ethereum’s Growing Demand Says About ETH Price Action
- Demand for ETH has increased as put-to-call ratios have decreased
- ETH price action remained stagnant as prices fluctuated
Ethereum [ETH] has been stagnating around the $3,500 mark for some time now. However, despite its sideways movement, the bullish sentiment around ETH has increased.
Demand for Ethereum is growing
According to recent data, 200,000 Ethereum options contracts recently expired, and the data surrounding this event hints at a rise in bullish sentiment in the Ethereum market. The Put-Call ratio, a key indicator of market bias, stood at a low of 0.36 at press time.
This means that there have been far fewer purchases of puts than calls – a sign that most options traders expect the price of Ethereum to rise. The maximum pain point of $3,600 further adds to the optimism. This price level is the point where most options contracts expire worthless.
If Ethereum rises above $3,600 at expiration, most call options will be profitable, again reflecting a bullish bias.
Finally, low implied volatility (IV) below 60% across all short-term ETH options contracts further fueled the bullish outlook. Here, implied volatility reflects expected price action, and a lower IV suggests that investors expect Ethereum’s price to remain stable or increase in the near term.
Source:
Looking at price developments
At press time, ETH was trading at $3,512.52. While the price of ETH appreciated significantly after May 20, over time the bullish sentiment around ETH exhausted itself. In fact, when the altcoin price fell again after May 27, the market trend also reversed.
If the bearish sentiment persists, the ETH price could drop as low as the $3,000 level. The CMF (Chaikin Money Flow) for ETH also fell significantly during this period.
This indicates that the money flow for ETH has decreased significantly. The RSI (Relative Strength Index) for ETH was also relatively low. The falling RSI could be a sign of a decline in ETH’s bullish momentum on the charts.
Source: Commercial View
How will the new addresses adapt?
AMBCrypto’s analysis of Santiment data found that network growth for ETH also fell significantly as the price of ETH declined. The decline in network growth implied that new addresses were losing interest in ETH and were unwilling to purchase the altcoin with the recent discount.
Read Ethereum (ETH) Price Prediction 2024-25
If this trend continues and responds to the refusal to purchase more ETH, it could have an additional negative impact on the price of ETH.
Additionally, ETH velocity has also dropped during this period, implying that transaction frequency has also decreased significantly over the past few days.
Source: Santiment
However, if the popularity of ETFs continues to increase, overall interest in ETH will also increase significantly as Wall Street money floods in.