- Ethereum bulls struggle to build momentum to $400 from the confirmed support at $370.
- Deribit becomes the first exchange to offer traders options with strikes of over $1,000 for ETH.
Ethereum is trading marginally below the coveted $400 level. This comes after an impressive recovery from support confirmed at $370 on Wednesday. On the upside, Ether recently traded new yearly highs at $415. However, it has not been a bed of roses because sustaining the price above $400 is currently out of the bulls’ grasp.
In the meantime, Ether is trading at $392 after advancing 1.26% from the opening value at $387. An intraday high has been traded at $394 (temporarily halting the gains towards $400). The prevailing trend is bullish amid expanding volatility. This means that if the technical levels improve, action above $400 would be achievable within the sessions on Thursday.
According to a report by CoinDesk, Deribit, a cryptocurrency derivatives trading platform, has begun listing Ether options with strikes going beyond $1,000. Traders are getting optimistic that the second-largest cryptocurrency will trader highs above $1,000 by the end of 2020.
At least 3,470 contracts (approximately $1.3 million having an ETH $1,120 call option have been entered for both December 2020 and March 2021). Deribit, based in Panama is the first platform to offer traders options for strikes beyond 1,000. The offer commenced on August 1. The COO of Deribit, Luuk Strijers told CoinDesk:
Volumes have been decent and open interest [open positions] is over 2,500 contracts already, indicating some traders believe ETH can potentially show a price move of over 180% in five to seven months.’
Ethereum price action over the last three weeks has had investors and traders sitting on the edge. Moreover, there is a lot of speculation emanating from the DeFi sector that is likely driving interest towards ETH. An option in this case gives the trader the right but not the obligation to buy or sell the underlying asset at the set price and the corresponding date.
As per the data by Skew, a crypto analytics platform, open interest for Ethereum options market has surged massively in 2020 from $14 million to $376 million, representing a growth margin of 2,585%. Most analysts and traders use the options market data to single out support and resistance zones as well as identify the potential price trend. However, according to Vishal Shah, an options trader and founder of Polychain Capital-backed derivatives exchange Alpha5:
I wouldn’t make much of the existing open interest of 2,500 contracts on these strikes. Almost every strike from $40 to $880 has that as minimum interest… That tells you something about expectations, the ETH options market is not big enough to drive the price of the underlying.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Ripple's move above this key level could trigger nearly 50% rally for XRP
Ripple has overcome a critical resistance level and flipped into a support floor on the weekly time frame. This development happened while XRP tightly consolidated for roughly 250 days. Investors can expect XRP to kickstart a massive rally.
Optimism price outlook with nearly $90 million worth of OP tokens flooding markets on Friday
Optimism volatility has shrunk in the ours leading to the network’s cliff unlock. It joins the likes of dYdX and Sui, which have similar events on their calendars. As token unlocks are often considered bearish catalysts, investors should brace for a reaction after the event.
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Retail watches from the sidelines with a bias for shorts
Bitcoin could clear $73,777 peak as BTC bulls resurface. Ethereum might fall 10% before next leg up as ETH RSI teases with sell signal. XRP could lose $0.6000 threshold as Ripple bulls fail to show up.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito price action shows a potential cup and handle formation. Based on theoretical measurement rules, a successful breakout could yield a 56% rally to $6.0. A breakdown of the $3.86 support level would create a lower low for JTO and invalidate the bullish thesis.
Bitcoin: BTC may have recovered, but is it out of the woods?
Bitcoin’s (BTC) upward momentum has shown a significant decline for the past two weeks or so. This development led to a bearish signal on the weekly and an uncertain outlook on the monthly.