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Ethereum Breaks New Record Amid 13% Rally, Options OI Reaches $7 Billion

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Fri, 12/03/2021 - 14:17
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Arman Shirinyan
Ethereum breaks another market prior to end-of-year rally
Ethereum Breaks New Record Amid 13% Rally, Options OI Reaches $7 Billion
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Ethereum options hit a new all-time high as Ethereum continues to move in the local bullish rally started at the end of November, Wu Blockchain reports.

Contracts open interest spikes

Ethereum options currently remain at the historical peak in open interest that is currently staying at $7 billion. On Dec. 31, almost 700,000 options are going to be delivered with a "bullish" Put/Call ratio of 0.47. The approximate max pain price is $2,500 for the currently open Ethereum contract with expiry on Dec. 31.

Increased options open interest closer to the end of the year is not something new for Ethereum. Ethereum open interest usually spikes near the end of the year as volatility on the cryptocurrency market increases and traders tend to hedge their positions.

What does high open interest tell traders?

Usually, options are utilized as a reflection of current market conditions. Since Ethereum is moving in both short and long-term bullish trends, call (buy) options are prevailing on the market with the majority of traders betting on the asset's price spike to $5,000.

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But while some traders may use options for speculative trading, others utilize them for hedging their positions. By opening put options on values like $4,300, traders hedge their positions in cases of unexpected market volatility.

Ethereum's previous ATH currently remains at $4,880, and more analysts are expecting the second-largest cryptocurrency on the market to reach the long-awaited milestone by the end of the year when most altcoins have historically reached new highs.

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.