show that $880 was ETH's lowest price | best cryptocurrency trading app
According to data, Ethereum option traders are less negative than they were in the past, and some investors recently went extremely long on 490,000 ETH in margin-based markets.
Ether's (ETH) price has risen by 16 percent since July 1, outpacing bitcoin (BTC) in recent trading. The change may have been influenced by investors who still have faith that the adoption of proof-of-stake (PoS) consensus by the Ethereum network will have a favourable impact on the market.
The next stage for this smart contract is the "Merge," formerly known as Eth 2.0. The last test on the Goerli test network is planned to take place in July before the Ethereum mainnet is given the all-clear to upgrade.
Because of its strong security and tried-and-true applications, such as MakerDAO, Ethereum has profited greatly from the flight to quality in the decentralised finance (DeFi) sector since Terra's ecosystem crashed in mid-May.
Data from Defi Llama shows that Ethereum currently has a market share of TVL of 57%, up from 49% on April 8. Despite this growth, the $35 billion in deposits made so far on the networks' smart contracts seem tiny in comparison to the $100 billion seen in December 2021.
Options traders experiment with the neutral range.
Trades should look at data from Ether's derivatives markets to identify how whales and market makers are positioned. The 25% delta skew is a warning flag when experienced traders overcharge for upside or downside protection.
The skew indicator decreases to -12 percent or less, suggesting investor optimism, when they anticipate an increase in the price of ether. A skew exceeding 12 percent, on the other hand, indicates reluctance to adopt bearish methods, which are typical of bear markets.
On July 7, after Ether completed a 19 percent surge over the previous four days, the skew indicator temporarily dipped into the neutral to negative territory. However, once the skew rose to the current 13 percent level, those option traders quickly took a more conservative approach, raising the prospect of a market fall. In other words, the higher the index, the less likely traders are to price downside risk.
Traders on margin have been very positive.
One should examine the margin markets to determine whether these moves were exclusive to the specific options instrument. Investors can use lending to leverage their holdings and purchase more cryptocurrencies. The gains (and possible losses) of those shrewd traders who open margin long positions depend on the rise in Ether's price.
Whales and large arbitrage desks have been observed fast establishing position contracts of 100,000 ETH or more to engage in Bitfinex margin trading.
Strangely, since June 13 these margin traders have significantly raised their long positions, and the present level of 491,000 contracts is almost at its highest level in eight months. This information demonstrates that these traders do not, in fact, anticipate a devastating price move below $900.
Even though the options risk criteria used by professional traders haven't changed significantly, margin traders are still positive and aren't willing to cut back on their long positions.
Trades may start to assume that the worst of the bear market is over if these whales and market makers are satisfied that $880 on June 18 was the absolute bottom.
