Keep on dreaming! Option data suggests the $ 560 Ethereum price will not materialize


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Bitcoin (BTC) and Ether (ETH) prices hit new highs this week as a series of bullish news fueled investor hopes that the next crypto bull market will mirror that of 2017.

Many inexperienced traders simply follow spot prices on the major crypto exchanges to gauge the direction the price could be heading. However, reviewing options markets data can provide additional relevant insights into market sentiment.

Looking at recent activity in Bitcoin options, it is clear that some trades took place on strikes that seemed unlikely even to the most bullish analyst. These trades include 20 BTC CME call options in December with a $ 70,000 strike and 56 BTC worth $ 100,000 in December at LedgerX.

These anecdotal trades may not reflect general market conditions, but oddly enough, the highest Ether options contract for December 2020 is $ 1,120. This trade is undoubtedly bullish considering there are only 42 days left to expire but not even close to the BTC options, up to 330% up or higher.

It’s worth noting that Deribit also holds ether call options for March 2021 with strikes of up to $ 1,600. Although this effect may have been caused by the start date of ETH 2.0 on December 1st, its upward trend is 230%. This is considerably less than with Bitcoin.

ETH options open strike interest by the thousands. Source: Skew

As the data above shows, of the $ 613 million open positions in Ether options, only 28% is $ 460 and above. This situation can be partly explained by the 23% rally over the past ten days, which indicates that traders were not expecting these prices.

It’s also important to keep in mind that options will be listed on most exchanges through March 2021. Therefore, some optimism can be expected for the more distant data. Purchase options at prices well above market levels are relatively cheap. The $ 600 ETH call option for January 2021 traded at $ 12 just two weeks ago.

Traders are more optimistic about Bitcoin

When comparing this data to the Bitcoin options markets, there is one notable difference. BTC options are notably more bullish, and there are $ 50,000 call options placed a long time ago for June and December 2021.

BTC options attract interest through strike, in BTC thousands. Source: Skew

Note that unlike the Ether markets, there are some massive stakes over $ 17,000. This time around, 40% of the outstanding interest on BTC options of $ 3.75 billion is $ 16,000 and above.

Bitcoin price has risen 18.5% in the last ten days, so these optimistic bets would have seemed even more unrealistic back then. The recent ETH rally should therefore not be an excuse for the lack of overly optimistic option deals.

Hence, one can only conclude that ether traders were not as optimistic as Bitcoin traders. Investors can conclude that this is a good thing as unrealistic expectations could frustrate investors.

However, the lack of appetite of Ether investors to wager $ 17 on a 25% bull run through December 25th is telling.

The views and opinions expressed here are solely those of author and do not necessarily reflect the views of Cointelegraph. Every investment and trading step is associated with risks. You should do your own research when making a decision.