In light of the fact that ETH is experiencing considerable negative volatility below $2,600, the option markets for Ether are “trending positive,” with a “bit of caution” from major investors, according to a Nansen research analyst who spoke with Cointelegraph.
Summary
• Ether options markets are trending positive despite negative volatility below $2,600.
• Major investors are cautious about the expected increase of ETH in the medium term due to the impact of options expiry events in February.
• Over 70% of open interest in options is in call contracts, indicating a growing number of traders are betting on the growth of Ether’s ETH.
• Nicolai Sondergaard, a research analyst at Nansen, suggests that investors are cautiously enthusiastic about the expected increase of ETH in the medium term.
The options expiry events in February might potentially play a key part in determining the price trajectory of the world’s second-largest cryptocurrency. Therefore, the structure of the Ether options market implies that traders are anticipating growth in the medium term.
According to the statistics provided by CoinGlass, as of 10:35 am UTC on February 16, more than seventy percent of the open interest in options is in call contracts. This indicates that a rising number of traders are betting on the growth of Ether’s ETH.
According to Nicolai Sondergaard, a research analyst at Nansen, the bullish posture indicates that investors are cautiously enthusiastic about the expected increase of ETH in the medium term.
According to the expert, who spoke with Cointelegraph, “The ETH options market is leaning optimistic, although there is a touch of caution,” including the following:
“The majority of the movement is in calls, particularly in the $3,000–$4,000 strikes, and the low Put/Call Ratio lends truth to the optimism. This indicates that traders are optimistic about growth in the medium term since there is a lot of attention on the expirations in February and March.”
According to data provided by Cointelegraph Markets Pro, Ethereum had a fairly flat trading pattern during the previous week, although it experienced a decline of more than 21% on the monthly chart.
Ether has not yet staged a strong comeback in the current cycle, and the price is still around 44% below its all-time high of more than $4,890, which was reached in November 2021, three years ago.
Ether Liquidations Below $2,600 Total $500 Million
Despite the positive outlook, institutional investors continue to exercise caution in the way they place their options, which is a reflection of the fact that Ether is still subject to a risk of falling prices. Sondergaard confirms this.
Options hedging accounts for 22% of block transactions, suggesting that some major players are monitoring the potential downside risks. He went on to say that although the implied volatility is skewed toward higher strikes, which indicates that bullish sentiment is there, steady historical volatility helps to keep things grounded.
To prevent further declines in liquidity, Ethereum must maintain its position above the $2,600 support level.
According to the statistics provided by CoinGlass, a hypothetical decline below $2,600 would result in leveraged short liquidations totaling more than $500 million across all exchanges.
External factors, such as international trade disputes, may also exert pressure on the pricing of cryptocurrencies like Bitcoin and Ether.
As a result of the United States and China’s announcement of increased import tariffs, market players are experiencing anxiety about a global trade war. The purpose of the meeting between Chinese President Xi Jinping and United States President Donald Trump is to resolve trade tensions. Investors are still waiting for this meeting to take place.
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