Large Funds Double Down on Ethereum $3K-$4K Price Target Bets

by

As a seasoned analyst with years of experience navigating the volatile crypto markets, I find myself intrigued by the recent bullish cues surrounding Ethereum (ETH). The large-scale buying of call options by funds with price targets of $3K-$4K by year-end, as indicated by Deribit data, is a clear sign of optimism that could potentially lead to a strong recovery for ETH.

As a crypto investor, I’m keeping an optimistic outlook on Ethereum (ETH). The big players seem to expect a robust recovery, with potential price targets ranging from $3K to $4K by year-end. According to recent data from Deribit, issued on November 7, the Trump victory has sparked increased interest in ETH, as large funds are buying heavy call options (bullish bets) with price targets of $3K, $3.2K, and even $4K before the end of this year.

According to Deribit’s statement, the perceived backing from Trump for Altcoins and DeFi seemed to boost even the long-struggling ETH. In the initial phase of November and December, large put options at 2.2k to 2.4k expired worthlessly. As optimism grew, investors started purchasing call options for 3k, 3.2k, and 3.6k in December, as well as call spreads between 3k and 4k for March. Once ETH surpassed the 2.8k mark, a notional $125 million worth of call spreads between 2.8k and 3.8k for March were traded.

Large-scale selling of bearish options (puts) for approximately $2.2K to $2.4K suggested a change in market sentiment within the options market. This was because major players did not foresee Ethereum (ETH) falling back to $2.4K again.

A Bullish Cue for ETH?

On the positive side, the significant increase in buying activity suggests that Ethereum might be poised for a robust comeback, having been affected by heavy negativity and a weak market mood over the last few months.

The enthusiasm around the largest altcoin was also evident in the ETH/BTC ratio, which tracks ETH’s relative price performance to BTC

BTC
$75 944



24h volatility:
1.2%


Market cap:
$1.50 T


Vol. 24h:
$60.74 B

.

Although all the recent attention has been on BTC, ETH gained ground this week, too. The ETHBTC hit a new yearly low on US election eve but was now up 7.3% as of the time of writing, which means ETH strengthened against BTC.

Source: ETH/BTC, TradingView

It’s worth noting that the current rebound of the ETH/BTC ratio may continue in the short term, potentially depending on the 50-day Moving Average (MA). Historically, the ratio has shown a further upward trend when it surpassed the 50-day MA (as indicated by the orange bubbles). So, the question is: will this pattern repeat itself?

During this period, the interest in buying ETH on the spot market from U.S. investors rebounded, having been low since October. As per the Coinbase Premium Index, which measures U.S. investor demand, it became positive when the price of ETH reached $2.9K.

Source: CryptoQaunt

On Thursdays, US ETF products that focus on Ethereum saw inflows totaling $79.7 million, reaching a two-month peak. Typically, when the Coinbase Premium Index shows positive readings, it signals a robust recovery for Ethereum. Therefore, holders of Ethereum could potentially reap additional profits if this trend continues and history repeats itself.

Source: ETH/USDT, TradingView

In the price graphs, overcoming the $3K mark is crucial to demonstrate further growth in ETH’s strength. This mark served as a strong support level back in H1 2024, and surpassing it might pave the way for potential goals at $3.2K and $3.6K.

Read More

2024-11-08 11:54