The Ethereum network is expanding as new addresses are being created, and data from derivatives markets suggests growing confidence in Ethereum’s future. This optimism could potentially drive ETH’s price higher in the coming days.
While Solana, XRP, and Cardano are getting a lot of attention in the altcoin market rally, Ethereum (ETH) has been quietly making progress. In the last 24 hours, ETH’s price increased by 2%, reaching $1839, and its market cap is now $221 billion.
Ethereum Network Grows Strong
According to data from Santiment, Ethereum’s recent rise above $1,800 is backed by a notable increase in the creation of new addresses, reaching the highest daily number since October 7th.
If this trend of the network growing and fewer Ethereum available for trading on exchanges keeps going, there’s a good chance that the price of Ethereum ($ETH) could go beyond $2,000 again.
Courtesy: Santiment
Exploring the ETH Derivatives Market
The discussion around the recent rise in Ethereum’s (ETH) price was sparked when its co-founder, Vitalik Buterin, moved ETH to Coinbase. Despite a 14.7% price drop from its peak at $2,120 in April 2023, two key metrics in the derivatives market show increasing optimism among investors, reaching levels not seen in over a year.
Firstly, the Ether futures premium, which measures the difference between two-month futures contracts and the current price, has surged to its highest level in more than a year. In a healthy market, this premium typically falls within the range of 5% to 10%. This suggests a rising demand for leveraged long positions in ETH futures, as the premium increased from 1% on October 23 to 7.4% on October 30, surpassing the 5% threshold, following a 15.7% price rally for ETH over two weeks.
Additionally, the 25% delta skew in Ether options, which indicates when arbitrage desks and market makers might overcharge for protection against price moves, reached a negative 16% level on October 27, the lowest in over a year. This reflected excessive optimism among traders as protective put options were trading at a discount. The current 8% discount for put options is a significant shift from the previous positive skew that extended until October 18.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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