- ETH price will breach $500 earlier than anticipated
- Ethereum price initially stalled below the $440 mark
- Open interest on Ether futures rose by 250%
Ethereum News Today – the open interest on Ether futures grew by 250% in the last three months to $1.7 billion. This incredible rise occurred as the digital currency breached $400 to reach its highest point in two years. At press time there’s no way to determine whether futures contracts are used for protection or whether they are the result of rising leveraged bets on the price of Ether reaching $500.
The only reliable data from such a market is the basis. This involves the comparison of futures’ contract prices versus spot prices on the open market. A positive basis indicates a contango situation. It typically happens in healthy markets. It implies that sellers are demanding more money to shift trade settlements.
ETH 1-month Futures Contracts Are Trading at a 20% Annualized Premium
Currently, ETT 1-month futures contracts are been sold at a 20% annualized premium. This means buyers are expecting Ether’s spot price to rise. Despite the strong bullish sentiment in the futures markets, ETH’s put/call ratio is neutral. There’s a striking contrast to the 0.8 area from three months back, which implies that puts smaller than bullish and neutral call options by 20%. Even though the Skew remains bullish, it is back to the same point from last month when Ether was trading sideways at $240. September options seem bullish as well.
With just under 40 days to the September 25 options expiration date, the markets must paint a clear picture of what’s at stake in the call and put options. Currently, there are 93.3K call options ($340 to $880) for the September expiry. The options with higher strike contain lower mark prices because they have smaller odds. Currently, the options are worth $4.4 million. The open interest is $40.1 million.
$500 Is Approaching Faster Than Anticipated According to Options Contracts
One interesting perspective from the $480 and higher strikes for the September 25 expiry is the sum of 53.7K call options. At the current mark rates, these call options are worth $1.0 million. They comprising 25% of $340 (alongside higher call options value). Looking at it from a derivatives trading point of view, the $500 level looks feasible in the next 40 days (and there’s a huge sum currently backing it).
The future contracts premium confirms the above indicators because professional traders remain bullish regardless of the recent $440 top that ETH posted. Ether is currently enjoying the positive momentum that was brought by the rapidly increasing usage of DeFi (decentralized finance), decentralized exchanges’ and oracles.