Ethereum (ETH) is exhibiting a notable pattern in the options market. Data from Deribit, a leading crypto futures and options trading platform, shows that ETH call options are heavily concentrated around the $4,000 strike price for both June and September expirations.
Options traders predict Ethereum at $4,000
This accumulation of ETH call options centered around the $4,000 mark indicates concentrated expectations among traders that the price of Ethereum could rise above $4,000 by these dates.
For context, an option is a financial derivative that gives the buyer the right to buy (in the case of a call option) or sell (in the case of a put option) the underlying asset at a predetermined price on or before a specified date. .
Notably, the crypto futures and options trading platform’s charts show that the $4,000 ETH strike price dominates the ETH options trading environment, with other rights on June and September expirations. exceeded the exercise price.
It is worth noting that such patterns indicate market sentiment and can influence trading strategies. In this example, the pattern suggests that most options traders are bullish on Ethereum and are likely expecting a significant increase in its value.
Additionally, this trend could cause fundamental traders to reconsider their positions in Ethereum, potentially changing their outlook to expect an upward trajectory in the asset’s performance.
Factors Affecting the Strike Price of the $4,000 ETH Option
This concentration of Ethereum call options with a strike price of $4,000 appears to be influenced by several factors, including the possible approval of spot Ethereum exchange-traded funds (ETFs) by the United States. Securities and Exchange Commission (SEC).
The final decision deadline for these spot ETF applications is set for May 23rd, and as Bitfinex Head of Derivatives Jag Cooner observed, traders are buying Ethereum options in hopes of a favorable outcome. Looks like they’re setting up a contract.
However, Deribit Chief Commercial Officer Luke Striges cautioned against drawing any final “conclusions” about the link between derivatives markets and expectations for approval of the Ethereum Spot ETF.
Streyas said the “June skew” is higher and indicates more “expensive calls,” but he pinpoints this as an expected correlation with ETF spot news and the upcoming Bitcoin halving. points out that it is difficult to do so.
Meanwhile, crypto analysts at Altcoin Daily recently outlined three key factors that could push Ethereum’s price to $4,000. Among these factors, expectations and possible approval of the Ethereum Spot Exchange Traded Fund (ETF) were highlighted as a key catalyst.
While Ethereum futures have already gained global acceptance, analysts stress that the green light for these spot ETFs could significantly drive Ethereum’s long-term price rise.
Regardless of this contrasting view of ETH, ETH is currently trading at $2,495, up 7.7% over the past week and 1.9% over the past 24 hours.
Featured image from Unsplash, chart from TradingView