ETH has seen significant rallies and declines this month, with a daily gain of nearly 11.3% and a daily decline of 10.5%. In today’s unpredictable market, it’s worrying why anyone should get bearish on ETH.
Even if that is the case, will ETH really continue to fall?
Investors want ETH to fall?
Not quite. Looking at Deribit’s put and call data, the put volume is up to 31,000, which is more than $ 90 million. These options mainly target ETH back to $ 2,700.
Since Deribit represents almost 96% of all open interests (open contracts) in the options market, it is considered to be almost the entire market opinion.
ETH option volume | Source: Deribit
This comment comes despite the fact that the options market has been trending upward for more than a month. The difference between latent volatility (IV) and actual volatility (RV) signals this because IV has supplanted RV for some time.
And since IV ATM (Break-Even Potential Volatility) hits over 100% in all 1-month, 3-month and 6-month periods, the market can expect some price movement in a positive direction.
IV ATM of the ETH | Source: Skew
There are also 60% call options under contracts expiring October 1, with investors looking for an ETH that hits $ 3,200.
But 40% of the put options also expire on October 1st, in addition to the other put options that expire on October 8th.
Expired ETH Open Interest | Source: Skew
How many discount options for ETH?
It’s impossible to say for sure, but there is a chance the price will go down. According to the probability index, there is a 54% chance that ETH will drop to $ 2,700 in October.
If the market wants to reduce that 54% chance and avoid slippage, buying pressure is required. Notice that the price has fallen 12.31% for the week. If you look at RSI and SAR, no immediate trend reversal is guaranteed.
ETH price for the week down by 12.31% | Source: TradingView
The rise in ETH prices will depend on these “buying networks”
CoinShares Weekly Report emphasize Digital asset investment products saw $ 95 million in inflows last week. Together with Bitcoin, ETH led the inflow. ETH’s weekly flow has been largely negative since May of this year.
However, history began to change as the month went on, and it tightened last week when ETH inflows rose to $ 29 million.
Weekly crypto flow | The source: CoinShares
At the same time is the number ETH participation in ETH 2.0 is also growing, despite a recent 6% drop in staking rewards. In fact, the number of tokens staked at the time of writing reached ATH at 7.7 million. This essentially underscores the fact that HODLers are pretty happy with the passive income they earn.
In fact, staking rewards act as a demand driver.
In addition, the most recent active supply (3-5 years) just hit a 21-month low. As coins become less active, they are considered illiquid and are more likely to be stored in cold stores. Looking at the broader trend, it can be concluded that there is no selling pressure on the spot market.
Last active supply of the ETH 3-5 years | The source: Glass knot
In addition, the number of HODL addresses over 1,000 coins just reached a 1-month high. The size of the stocks makes it clear that the big players, including whales and institutions, are absorbing and buying.
Investments in retail have also increased recently. The increasing number of HODLers with more than 0.01 ETH is evidence of the above statement.
Such buying pressure is all that the ETH market currently needs. Should the above trend continue for the foreseeable future, the ETH price will react positively.
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According to AZCoin News