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ETH options analysts say the “relatively small number” of Ether calls bought suggests that the altcoin’s price gains may be limited in the near term.
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Amid a recent positive sentimental shift in Bitcoin (BTC), recent data from a decentralized finance (DeFi) options protocol suggests that traders are more skeptical of the performance of Ether (ETH).
“ETH has nearly 2.5x the number of calls sold compared to calls bought, indicating that traders may believe the upside potential for ETH is capped,” Derive founder Nick Forster stated in an Oct. 13 report viewed by Cointelegraph.
Traders see ETH’s potential for significant price gains as ‘limited’
According to the report, citing data from Derive, Ether Calls Sold — when traders sell call options expecting the price to stay the same or decline — stood at 34.5% at the end of September, and Calls Bought — when traders buy call options, expecting Ether’s price to rise — stood at 15.5%.
ETH Put Call Trade Distribution Chart. Source: Derive/amberdata
Forster explained that the “relatively small number of calls bought further supports the notion that ETH’s potential for significant price gains may be limited in the near-term.”
Meanwhile, Forster pointed out the significant amount of Bitcoin Open Interest (OI) at the $75,000 and $100,000 strikes prices — which are the specific prices at which options can be exercised — suggesting that traders are positioning “for significant movement.”
He added these “could act as key barriers or breakout levels.”
“Interestingly, the skew in ETH open interest, with nearly 2.5-times more calls sold than bought, suggests that traders see the upside as limited for now,” Forster explained.
BTC versus ETH will be “key to watch” ahead of US election
He further claimed that “the divergence” between Bitcoin and Ethereum will be “key to watch” as we get closer to the United States presidential election on Nov. 5.
Related: Vitalik Buterin ponders Ethereum’s post-Merge future
At the time of publication, Ether is trading at $2,615, up 7% since Oct. 7, according to TradingView data.
Ether price in USD. Source: TradingView
Meanwhile, other data points to long-term confidence among Ethereum traders.
On Oct. 8, Cointelegraph reported that almost a third of all Ether has been staked as token holders show long-term interest in the crypto asset and the rewards they can receive.
At the time, onchain data provider IntoTheBlock said that 28.9% of all Ether had been staked.
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
This article first appeared at Cointelegraph.com News
