The past two weeks have been nothing more than a ride on the Ether (ETH) roller coaster, which ranged in value from $ 2,000 to $ 2,650. The crash of 20% on April 17 liquidated long-term futures contracts worth $ 1 billion, as well as sharply reduced investor risk appetite.
The price of Ether (ETH) in dollars on Coinbase. Source: TradingView
However, as explained above, a 28% hike over the past few days has pushed the open interest rate on Ether futures to $ 8.2 billion, just 5% below the record set on April 15th. Options markets, which are up 45% since the end of March 25.
The latest price recovery is attributed to the CEO of PayPal and claims that the demand for cryptocurrencies is several times higher than expected. Additionally, the net worth of Ethereum smart contracts reached an all-time high of $ 54.2 billion, led by Uniswap, Compound and Maker.
Ethereum network status unlocked. Source: DeBank.com
The 154% increase in that estimate came at a time when network fees were kept above $ 8 per transaction, dampening speculation of predatory competition. Meanwhile, Binance Smart Chain reached $ 17 billion in TVL, and the growth in Decentralized Finance (DeFi) was more than enough to support both.
Open interest has grown, but 22% of them are in the mature stage
Although the current $ 4.2 billion in Ethereum options is a record high, the $ 930 million expires on April 30th. As usual, Deribit exchange dominates with a market share of 90%.
It should be noted that not all options will eventually be traded, as some of these strikes now appear to be unfounded, especially with less than three days remaining.
The options are split into two parts because the put (buy) options allow the buyer to purchase Ether at a fixed price on the expiration date. They are often used in neutral arbitrage trades or bullish strategies.
Meanwhile, put (put) options are the preferred hedging tool to guard against negative price fluctuations.
To understand how these competing forces are balanced, one must compare calls and place volumes at each expiry (strike) price.
April 30, ETH Options at Deribit. Source: Laevitas.ch
When the bears were surprised, a strange picture emerged: 91% of puts had an interest rate of $ 2,400 or less. Meanwhile, the bulls were overly optimistic: nearly half of these options were valued at $ 2,880 or more.
The Bulls have a decent win of $ 115 million
However, any expirations over $ 2,240 are very appropriate for the bulls, who are currently advancing at an open interest rate of $ 115 million. That difference would double in favor of call options to $ 2,880, although that doesn’t justify a 10% price increase for Ether.
For bears, this game appears to be totally lost, as only 17% of the Miracle under $ 2,240 would be enough to exclude the benefits of the connection options.
There is little evidence at this point to believe alternatives expiring on April 30th will offer an Ether reward. Deribit and OKEx both make their decisions at 08:00 UTC, and traders are likely to focus only on June options.