Ether (ETH) has overtaken Bitcoin (BTC) in the options market for the first time in history as Deribit’s Ether Options Open Interest (OI), worth $5.6B, has outperformed by 32% OI of Bitcoin options valued at $4.6 billion.
OI is calculated by adding all the open contracts of trades and subtracting the contracts when a trade is closed. It is used as an indicator to determine the position of the market and the force behind price trends. Deribit is the largest BTC and ETH options exchange in the world, with over 90% of global trading volume.
Deribit data highlighted that ETH options are mostly call options, with a put to call ratio of 0.26. The proportion of ETH contracts has reached a new yearly low as The Merge date approaches.
In the put option, buyers have the right, but not the obligation, to sell the underlying asset at a predetermined price on or before a specified date. In general, buyers of put options are implicitly bearish, while those who bet on call options are bullish.
A put-call ratio above 0.7 or 1 indicates a bearish market sentiment, while a ratio value below 0.7 and close to 0.5 indicates an emerging bullish trend.
The recent spike in open interest in ETH in the options market with underlying bullish sentiment among traders is attributed to the next date of The Merge scheduled for the third week of September.
While ETH continues to see increasing dominance in the options market, ETH’s quarterly futures contracts, scheduled to expire in December 2022, have entered backwardation, in which the futures price becomes lower than the price. cash. Ether spot and futures price moved as low as -$8 on Monday. While this may seem like a bearish outlook, BTC is up 15% after entering backwardation in June.
In addition to growing anticipation for the upcoming proof-of-stake (PoS) transition, analysts have also pointed to the possible scenario of an airdrop in the event of a chain split. A Galois Capital survey revealed that 33.1% of respondents believe the upgrade will cause a hard fork, while 53.7% anticipate a smooth network transition.
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