According to Nansen analyst Nicolai Sondergaard, the bullish positioning suggests that investors are cautiously optimistic about ETH's growth in the medium term.
"The
#ETH options market is bullish, but at the same time cautiously optimistic, the analyst told COINTELEGRAPH. Most of the action is in calls, especially around the $3,000-4,000 strike, and the low put/call ratio supports
#optimism , he added. Expiry dates in February and March are in focus, and traders seem confident of medium-term growth.
ETH traded virtually flat last week, but on a monthly chart it fell more than 21%, Cointelegraph Markets
#Pro data shows.
ETH has yet to recover significantly in the current cycle, and three-year prices
Despite the optimistic outlook, large investors' options positioning remains cautious, suggesting that downside risks to ETH remain, according to Sondergaard,
"Some large players are hedging with options (22% of block trades), indicating that they are keeping a close eye on downside risk, Sondergaard said. Implied volatility is leaning towards higher strikes, indicating bullish sentiment, but stable historical volatility is holding things back, he added.
ETH needs to stay above the $2,600 support level to avoid a liquidity surge to the downside. As CoinGlass data shows, a potential correction below the $2,600 level would trigger the liquidation of more than $500 million in short positions across exchanges.
Ether prices could also come under pressure from external factors such as geopolitical trade tensions. Ether price may also come under pressure from external factors such as geopolitical trade tensions.
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