The significant dumping of $2.2K-$2.4K puts (bearish bets) signaled a market sentiment shift in the options market, as large players didn’t expect ETH to drop to $2.4K again.
Large players expected a strong recovery for Ethereum ETH $4 015 24h volatility: 0.7% Market cap: $485.51 B Vol. 24h: $36.91 B , with $3K-$4K price targets in mind. According to the latest Deribit data, issued on 7 November, the Trump victory lifted ETH as large funds bought massive call options (bullish bets) with $3K, $3.2K, and $4K price targets by the end of the year.
“The implied Trump support for Alts+Defi lifted even the long-suffering ETH. Initially, Nov+Dec 2.2-2.4k Puts dumped. Then, as optimism took hold, Dec 3k+3.2k Calls, Dec 3.2-3.6k, and Mar 3k-4k Call spreads were bought. As ETH >2.8k, Mar 2.8-3.8k Call spread traded $125m notional,” wrote Deribit.
The significant dumping of $2.2K-$2.4K puts (bearish bets) signaled a market sentiment shift in the options market, as large players didn’t expect ETH to drop to $2.4K again.
A Bullish Cue for ETH?
On the upside, the massive calls buying was a bullish cue that ETH could be on the verge of a strong recovery after suffering intense FUD and weak market sentiment in the past few months.
The enthusiasm around the largest altcoin was also evident in the ETH/BTC ratio, which tracks ETH’s relative price performance to BTC BTC $112 290 24h volatility: 0.9% Market cap: $2.24 T Vol. 24h: $72.36 B .
Although all the recent attention has been on BTC, ETH gained ground this week, too. The ETHBTC hit a new yearly low on US election eve but was now up 7.3% as of the time of writing, which means ETH strengthened against BTC.
Source: ETH/BTC, TradingView
That said, the ETH/BTC ratio’s extended short-term recovery could depend on the 50-day Moving Average (MA). In previous scenarios (orange bubbles), an extra uptrend was seen when the ratio broke above the 50-day MA. Will the trend repeat?
In the meantime, the ETH spot market demand from US investors also returned after being negative since October. According to the Coinbase Premium Index, which gauges US investor demand, it flipped positive as the ETH price hit $2.9K.
Source: CryptoQaunt
The US spot ETH ETF products also saw $79.7 million inflows on Thursday, hitting a two-month high. Historically, positive Coinbase Premium Index readings have coincided with a strong recovery for ETH. So, ETH holders could benefit from extra gains if the metric stays positive and the trends repeat.
Source: ETH/USDT, TradingView
On the price charts, $3K was the key level to reclaim to show continued ETH strengthening. This level was H1 2024 support, and reclaiming it could set the stage for eyeing $3.2K and $3.6K targets.
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