Ethereum Traders Anticipate All-Time High, Despite Drop
Key facts:
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The imminent launch of Ethereum ETFs sparks excitement among traders.
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Overall, a price of more than $4,000 per ether is expected by September.
Even though the price of ether (ETH), the Ethereum cryptocurrency, has fallen 6% in the last seven days, traders are optimistic about its future.
Currently, there is a concentration of purchase options that expire at the end of September at the strike level of $4,000according to data from Deribit, the main digital asset options exchange.
This positive sentiment, reflected in the options markets, suggests an ETH rally in the coming months.
The chart below shows that the total value of call option contracts priced at $4,000 is $158 million.
Call options give the buyer the right, but not the obligation, to purchase ether at a specified price before a specified date.
Greg Magadini, director of derivatives at Amberdata, highlighted in statements to the press that “if ETH exceeds $ 4,000, we will probably try and break new all-time highs.”
The current all-time high for ETH is $4,871, a price it reached in November 2021.
The bullish outlook remains
The trader known as IamCryptoWolf on the social network also positive stance on the price of Ethereum, specifically for the third and fourth quarters of this year.
This perspective is based on the observation of a cup and handle pattern as seen in the following graph.
The pattern is a bullish technical indicator commonly observed on price charts. It is characterized by a “U” shape followed by a lateral or slightly downward movement, similar to the handle of a cup.
It is interpreted as a bullish continuation signal, suggesting that the previous uptrend will resume after a period of consolidation. The break above the upper edge of the cup (the peak of the formation) is considered confirmation of the bullish breakout.
Factors driving Ethereum
Among the factors supporting this bullish sentiment is the US Securities and Exchange Commission’s (SEC) investigation into Ethereum 2.0. Last week, the regulator announced that it will stop investigating whether ether is a security (security) not registered.
This way, an uncertainty is eliminated, since, for the SEC, ether would be a commodity (commodity) and not a security. Therefore, it has no jurisdiction over that cryptocurrency.
Furthermore, spot ether ETFs, approved last May, have generated great expectations in the market. The applicant companies are completing the paperwork related to the S-1 forms and are now waiting for the SEC to inform the issuers of any final changes and their final approval.
As reported by CriptoNoticias, ETFs would have the green light to begin trading on the United States stock market on July 2according to Eric Balchunas, an analyst at Bloomberg Intelligence
Once this happens, institutions and corporations could arrive with large amounts of capital, so the companies issuing the ETFs will have to increase their purchase of ether to back the funds. The consequence, due to the law of supply and demand, would be an increase in the price of ETH.
At the moment, Ethereum has a price of $3,300, as reflected in the TradingView chart, having fallen 11% in the last month.
The decline of ether and the rest of the cryptocurrency market has been largely driven by the fall in the price of bitcoin, which, being the main digital currency, its price affects the rest.
