According to the Bitfinex Alpha Report, Ethereum options open interest continues to “outshine Bitcoin” at an all-time high of $8 billion. With a relevant event, as it is, that the number of addresses with more than 10 ETH tokens, exceeded its historical maximum on August 12, with a total of 313,353 addresses.
As we have previously mentioned in Cointelegraph in Spanish, the Ethereum network is only weeks away from its expected “The Merge” or merger, which causes the Ethereum cryptocurrency (ETH) and the altcoins to register increases in their value.
“The Merge” or merger, is the step that inaugurates the Ethereum 2.0 stage, in which it will go from a Proof of Work (PoW) or Proof of Work system, to the new chain based on proof of participation, Proof of Stake ( PoS).
As the report explained, Bitcoin open interest remains well below the peak at just 35% of ATH. So; thus, open interest Ethereum options recently outperformed BTC options for the first time.
Also; They also mention that traders are likely to use the options market to hedge against a strong supply in the spot market.
“This appears to be the result of operators taking call options with “the Merge”, or the Fusion, scheduled for mid-September”, they highlight in the report.
“The Whales”: Role and movements
Commonly, the so-called “whales” manage to move the market. Traditionally, looking at whale holdings, defined as on-chain entities with more than 1,000 BTC, has been a good indicator of how dynamic they are. So, on-chain behavior is typically contrasted between bitcoin whales and retail-sized addresses to gauge market trends.
However, the study reveals that these investors, for the first time in history, presented difficulties since May to obtain profits, In the last seven days alone, the whale SOPR metric has remained above 1 for more than seven consecutive days, the longest period since April 2022.
As the downward pressure on Bitcoin price eased somewhat after the labor markets report and recently the US Consumer Price Index figures, the whales reduced spot exposure as a sign of the market instability.
In the Bitfinex Alpha Report, they suggest that it should be noted that wallet entries do not necessarily represent purchases.however this is somewhat supplemented by the wallet receipts metric.
Regarding the causes of the movement of the whales, Glassnode offers a metric that directly reflects the supply of BTC in the hands of “the whales” with a movement of USD 7.5 million.
“Similar to long-term and short-term fork dynamics, whales buy weakness, create market momentum and spread strength (…) We reiterate, this is not about the majority of their positions, but the Whales appear to be reducing cash exposure to or slightly below their cost base.”highlighted from Bitfinex.
Which means that, seeing whales buying and retailers selling is generally bullish. And seeing whales selling but retailers buying is typically bearish.
“However, recent trends show that retailers can make better decisions as the market matures,” the study reveals.
Miner Behavior
To conclude the weekly report, Bitfinex Alpha Report, mentioned in its analysis, that the mining difficulty has been reduced recently since it peaked in May-June 2022. During the same period, miner stress also peaked, when BTC prices fell below $20K.
However, in recent weeks, a notable decrease in the distribution of miners to exchanges has been observed.
“As the pressure on the miners eases, along with the whales, the miners also seem to be taking profits. Basically, they are forced to sell to cover the costs of additional mining rigs built into their infrastructure as collateral.”
Despite the fact that Bitcoin continues to be the most popular and largest cryptocurrency according to its market capitalization in the month of July, the miners who worked with the crypto ETH obtained higher profits.
In the last two weeks, the aggregate balance of miners has decreased by approximately 4.7 thousand BTC.
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