Betting Big On Ethereum: Options Traders Target $4,000 Mark Amid Market Optimism

Ethereum

Ethereum (ETH) is showing a noteworthy pattern in the options market. According to data from Deribit, a leading platform for crypto futures and options trading, there’s a significant concentration of call options for ETH around the $4,000 strike price for both the June and September expiries.

Options Traders Anticipate $4,000 Ethereum

This accumulation of ETH call options centered on the $4,000 mark indicates a concentrated expectation among traders that the price of Ethereum could rise to, or above, $4,000 by these dates.

For context, options are financial derivatives that give the buyer the right, but not the obligation, to buy (in the case of call options) or sell (put options) the underlying asset at a predetermined price on or before a specified date.

Notably, according to a chart from the crypto futures and options trading platform, the $4,000 ETH strike price emerged as the dominant position in the ETH options trading landscape, surpassing other strike prices for the June and September expiry dates.

Ethereum (ETH) Options Open Interest By Strike Price.
Ethereum (ETH) Options Open Interest By Strike Price. | Source: Deribit

It is worth noting that such a pattern indicates market sentiment and can influence trading strategies. In this instance, the pattern implies that most options traders are likely bullish on Ethereum, anticipating a notable increase in its value.

Furthermore, this trend might lead fundamental traders to reconsider their positions on Ethereum, potentially shifting their outlook to expect an upward trajectory in the asset’s performance.

Factors Influencing $4,000 ETH Options Strike Price

This clustering of Ethereum call options at the $4,000 strike price appears to be influenced by several factors, including the potential approval of a spot Ethereum exchange-traded fund (ETF) by the US. Securities and Exchange Commission (SEC).

With the final decision deadline for these spot ETF applications set for May 23, traders seem to be positioning their Ethereum options contracts in anticipation of a favorable outcome, as observed by Bitfinex’s Head of Derivatives, Jag Kooner.

However, Deribit’s Chief Commercial Officer, Luuk Strijers, cautions against drawing definitive “conclusions” about the link between the derivatives market and the Ethereum spot ETF approval expectations.

Strijers notes that while the “June skew” is higher, indicating more “expensive calls,” it’s challenging to pinpoint this precisely to the spot ETF news or expected correlation with the upcoming Bitcoin halving.

Meanwhile, Altcoin Daily crypto analysts recently outlined three key factors that could propel Ethereum’s price to $4,000. Among these factors, the anticipation and potential approval of Ethereum Spot Exchange-Traded Funds (ETFs) were highlighted as a major catalyst.

While Ethereum futures have already gained global acceptance, analysts emphasize that the green light for these spot ETFs could significantly trigger Ethereum’s long-term price appreciation.

Regardless of this contrasting ETH view, ETH currently trades at $2,495, showing a 7.7% increase in the past week and a 1.9% rise in the past 24 hours.

Ethereum (ETH) price chart on TradingView
ETH price is moving sideways on the 4-hour chart. Source: ETH/USDT on TradingView.com

Featured image from Unsplash, Chart from TradingView

Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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