Ethereum $500 Target is Closer than it Seems According to ETH Futures Data
The price of Ethereum has fallen to $420, but ETH options futures data suggest that $500 is closer than it appears. The cryptocurrency broke through the $400 mark on Tuesday, reaching its highest level in two years. Over the past three months, the open interest rate on ETH futures has grown 250% to more than $1.7 billion.
This positive basis, also known as a premium, indicates an unexpected situation, which is expected in a healthy market. Unfortunately, it is not possible to determine whether these futures contracts are primarily used for protection or as an increased leveraged bet. The only reliable information on the market is the open interest rate, a measure of the number of contracts offered for sale or purchase.
This shows that sellers are charging more to move transactions, and futures contracts are trading at a higher interest rate, suggesting that buyers are betting that the spot price of Ether will rise.
The Neutral Put-Call Ratio
The two most commonly used indicators to gauge the mood of bulls and bears are the put-call ratio and basis. The put/call ratio is a neutral position. It is composed of the rate of calls to put options on the US futures market and the price of Ether. Requests are usually used for neutral or bullish strategies, but the opposite is true for puts.
The put/call ratio for the $500 strike price on the US futures market is higher than the strike price ratio for the ether price, suggesting that the put is more bullish than its call counterpart on the market.
To better understand whether the put/call ratio is weighted by prior market sentiment, the current imbalance provides a real-time indicator of fear and greed based on the pricing of options. The oblique index has moved into negative territory, with call options (neutral to bullish) more expensive than the corresponding put.
This indicator usually oscillates between 20 and 40 and reflects the current market, but it does not normally. The chart above shows that professional traders have become less bullish since Ether finally broke the 400-dollar mark on August 13. While the tilt remains in bullish territory, it is now lower than in previous months when Ether was trading sideways at nearly $240 when it was trading sideways. With less than forty days to go before the options expire on September 25, the market is painting a picture of how much is currently at stake for both call and put options.
Multiplying the blow to open interest rates by the fair price tag, one can derive the number of jobs that would be created at present.
The Upcoming Bullish September
There are currently more than 1,000 options for the high-ramp option available on the market. The higher the ramp options, the lower the brand price, since the chances of this are lower, but the higher the brand, the better.
This suggests that the mood of professional traders is less bullish, as pricing shows, and that much less money is invested in input options. Open interest gives equal weight to both strokes, with the use of this marker providing better data. Currently, the put option is valued at $4.4 million, and the possibilities value the opportunity at approximately $3.5 million, or about 1% of the total market capitalization.
The $500 High Seems Feasible as per Option Contracts
At the current price increase, this is likely to be about 1.5% of the total market capitalization, or about $2.4 million. The total amount of open interest for the put option at the time of writing is $1.0 million, with an average of $0.1 million per stroke and a median of 1 million strokes.
There is also a hefty amount of money behind the $500 level at the moment, and from the perspective of derivatives trading, and open interest rate of $1.5 million over 40 days seems feasible. Ether seems to be enjoying a positive dynamic, driven by the rapid growth of decentralized financial markets and the new use of technology. While the market appears bullish following the recent rise against the dollar, such indicators are not confirmed by futures contracts.
