The open interest on Ether’s (ETH) futures grew 250% in the last three months to reach $1.7 billion. This incredible accumulation occurred when the cryptomone broke the $400 resistance to reach its highest levels in two years.
Interest in Ether’s options surpasses Bitcoin Up and may take ETH to new levels
ETH futures open interest in USD terms
Unfortunately, there is no way to determine whether futures contracts are used primarily for protection or are the result of increased leveraged betting where Ether’s price reaches $500.
The only reliable information from that market is the basis, which is the comparison of the price of a futures contract with the spot price of the asset on the open market.
A positive basis, also known as the „premium“, indicates a contango situation (the spot price of the asset is lower than the future price of the asset), which is expected during healthy markets. This simply shows that sellers are asking for more money to postpone settlement of the transaction.
Currently, trading of 1-month futures contracts is carried out at an annualized premium of 20%, indicating that buyers are betting that Ether’s spot price will rise.
The buy-sell ratio has become neutral
To measure how bullish professional traders are, we must focus on the option markets. The two most commonly used indicators to evaluate bullish and bearish sentiment are the buy-sell ratio and the bias.
The buy-sell ratio consists of comparing the open interest of put options to call options. Call options are mainly used for neutral to bullish strategies and the opposite is true for put options.
Despite signs of strong upward sentiment in the futures markets, the bid-ask ratio is in a neutral position, with open call and put options virtually balanced.
This is in startling contrast to the 0.8 level three months ago, which indicates that sales were 20% smaller than the neutral, bullish call options.