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Bitcoin (BTC) and Ether (ETH) prices hit new highs this week as a slew of bullish news continued to pump investor hope that the next crypto-bull market mirrors the one seen in 2017.
Many inexperienced traders simply follow spot prices on major cryptocurrency exchanges to gauge the direction the price might take. However, reviewing data on options markets may provide additional relevant information on market sentiment.
Looking at the more recent activity in Bitcoin options, it is clear that some trades took place on strikes that seemed unlikely to even the most bullish analysts. These deals include 20 BTC CME December call options with a $ 70,000 strike and 56 BTC’s $ 100,000 December strike value on LedgerX.
These anecdotal exchanges may not reflect broader market conditions, but strangely, the highest Ether options contract for December 2020 is $ 1,120. This trade is undoubtedly bullish considering there are only 42 days to expiration, but not even close to BTC options waiting for a 330% rise or higher.
It is worth noting that Deribit also holds call options on Ether for March 2021 with strikes of up to $ 1,600. While this effect may have been caused by ETH 2.0’s launch date on December 1st, its upside is 230%. This is considerably lower than Bitcoin’s options.
As the data above shows, of the $ 613 million open interest in Ether options, only 28% stands at $ 460 and above. This situation can be partially explained by the 23% rally that has occurred over the past ten days, indicating that traders were not expecting these prices.
It is also important to remember that options through March 2021 are listed on most exchanges. One should therefore expect some optimism for later dates. Buying options at prices well above the market level is relatively cheap. The $ 600 ETH call option for January 2021 was trading at $ 12 just two weeks ago.
Traders are more optimistic about Bitcoin
When comparing this data to the Bitcoin options markets, there is a noticeable difference. BTC options are noticeably more bullish, and there are $ 50K call options that were placed a long time ago for June and December 2021.
Note how, unlike the Ether markets, there are some massive wagers above $ 17,000. This time, 40% of the $ 3.75 billion open interest of BTC options equals $ 16,000 and more.
Bitcoin’s price has risen 18.5% over the past ten days, so these optimistic bets would have seemed even more unrealistic at the time. Therefore, the recent ETH rally should not be an excuse for the lack of overly optimistic options trading.
Consequently, it can only be concluded that Ether traders were not as optimistic as Bitcoin traders. Investors can infer that this is a good thing, as unrealistic expectations could frustrate investors.
However, Ether investor’s lack of appetite to wager $ 17 for a 25% bull run through December 25 is significant.
The views and opinions expressed herein are solely those of author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your research when making a decision.
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