By
Temitope Olatunji
April 18th, 2024
The recent ETH options data shows that Ethereum can hit a price of $500. There is enough liquidity and there are obvious calls for this feat to be achieved
It has been a bullish ride for cryptocurrencies as there is a resurgence in price in the past weeks. For the first time in 2 years, the price of Ethereum (ETH), the second-largest cryptocurrency by market capitalization traded a new high close to $440.
With the impressive bullish trend, ETH Options, and Futures have also seen a massive uptick and as data shows, this boost may soon drive ETH’s price to $500 per coin. Open interest on Ether (ETH) futures surged by 250% over the past three months to reach $1.7 billion.
Understanding the underlying basis for the growing interest in ETH futures can help know whether investors enter into a futures contract as a hedge against uncertainties or increasing the leverage on the possibility of Ethereum price reaching $500
In this analysis, Cointelegraph noted that the only way to understand this is to use the only reliable information from such a market as the basis, which is the comparison of a futures’ contract price versus the spot price of the asset on the open market. As it stands, ETH 1-month futures contracts are trading at a 20% annualized premium, indicating that buyers are betting that Ether’s spot price will rise.
ETH Options Driving $500 ETH Price Is Feasible
The September Options Price which is due to expire by the 25th of the month is bullish as confirmed by the currently active stake in both call and put options.
There are currently 93.3K call options from $340 up to $880 for the September window. Options with higher strike have lower mark prices, as their odds are smaller. With enough cash liquidity to brace the growth and the over 50,000 call options at $480 in the September window, the surge in ETH price has a great chance of happening.
As the major blockchain network powering Decentralized Finance initiatives, ETH has also benefitted from the DeFi surge in the past months. Decentralized exchanges are growing in popularity as much as DeFi lending.
With the expectations of a surge in the coming months, all ETH affiliated derivatives are likely to also get a boost.