Ethereum [ETH], the largest altcoin saw a major decline below the $1,600 support similar to Bitcoin [BTC]. ETH even dived below $1,550 before the bulls tried to take a stand but failed. Despite the lack of real fireworks in ETH, open interest in futures markets continues to see unprecedented levels.
Could this be a sign of volatility around the time of the upgrade?
We have to lift off
Ethereum speculative action continues, with over $6.12 billion in outstanding Open Interest for Call Options. Put options accounted for a much smaller share as highlighted by Glassnode’s latest insight.
As per the graph above, Put Options registered a much smaller number of $1.5 billion. Thus, making for a Put/Call Ratio of 0.25.
ETH has been dominated by bullish call options traders as the Put/Call ratio (PCR) stood at 0.25. In fact, at press time, the rate stood at 0.24, which is again a bullish sign.
A PCR ratio below one suggests that traders are buying more Call options than Put options. It signals that most market participants are betting on a likely bullish trend going forward.
Source: Cryptorank.io
Interestingly, most of Ethereum’s option bets were placed for 30 September and 30 December. This, indeed, shed light on traders’ bullish bets on a potential ETH rise after the Merge.
The much-anticipated Merge would lead to a reduction in ETH issuance and bring a store of value appeal to the asset.
Furthermore, the said incline wasn’t just a one-night wonder that happened overnight. ETH’s open interest, for the first time, overtook industry leader BTC on 1 August as covered in a previous report.
The open interest of Deribit Ethereum options registered a notional value of $5.6 billion exceeding the open interest of Bitcoin’s $4.3 billion. This was 32% less compared to the value locked in open ETH options trades.
Nothing to worry about?
That being said, over $100 million ETH leveraged positions were liquidated in the past 24 hours as per CoinGlass. ETH suffered and there’s no doubt about it.
Source: CoinMarketCap
But recovery could be in play as ETH soared above the $1.62 mark after registering a fresh 7% surge on CoinMarketCap.
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