Betting Heavily on Ethereum: Traders Eyeing $4,000 Price Amidst Bullish Sentiment
In the options market, Ethereum (ETH) is displaying a remarkable trend. Deribit, a prominent platform for crypto futures and options trading, has reported a significant concentration of call options for ETH centered on the $4,000 strike price for both June and September expiries.
These aggregated ETH call options focusing on the $4,000 mark suggest that traders hold the expectation that Ethereum’s price will reach or surpass $4,000 by those specified dates.
Options are financial derivatives providing the buyer with the right, but not the obligation, to buy (call options) or sell (put options) the underlying asset at a predetermined price on or before a specific date.
Notably, according to a chart from the crypto futures and options trading platform, the $4,000 ETH strike price has emerged as the dominant position in the ETH options trading landscape, surpassing other strike prices for June and September expiries.
This pattern signifies market sentiment and can influence trading strategies. It implies that the majority of options traders are likely optimistic about Ethereum, anticipating a notable uptick in its value.
Moreover, this trend might prompt fundamental traders to reevaluate their positions on Ethereum, potentially shifting their outlook towards expecting an upward trajectory in the asset’s performance.
Several factors seem to be influencing the clustering of Ethereum call options at the $4,000 strike price, including the potential approval of a spot Ethereum exchange-traded fund (ETF) by the US Securities and Exchange Commission (SEC).
Traders appear to be positioning their Ethereum options contracts in anticipation of a favorable outcome, in light of the impending decision deadline for these spot ETF applications on May 23, as observed by Jag Kooner, Bitfinex’s Head of Derivatives.
However, Luuk Strijers, Chief Commercial Officer of Deribit, advises against jumping to definitive “conclusions” about the link between the derivatives market and the expectations surrounding the Ethereum spot ETF approval. While the “June skew” indicates higher prices for calls, Strijers highlights the challenge in precisely attributing this to the spot ETF news or the expected correlation with the upcoming Bitcoin halving.
Recently, Altcoin Daily crypto analysts outlined three significant factors that could propel Ethereum’s price to $4,000. One of the major catalysts highlighted was the anticipation and potential approval of Ethereum Spot Exchange-Traded Funds (ETFs).
Despite contrasting views on ETH, it is currently trading at $2,495, exhibiting a 7.7% increase over the past week and a 1.9% surge in the past 24 hours.
(Image credit: Unsplash, Chart source: TradingView)
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