Why Professional Traders Expect Ethereum Rally to $5,000

The start of trading with Ethereum ETFs seems to be only a matter of time after a fundamental decision by the US Securities and Exchange Commission (SEC). The market for Ethereum options is now signaling price gains in the summer.

For the moment, Ethereum (ETH) is the top topic among crypto traders

On Thursday, the US Securities and Exchange Commission (SEC) made it clear that it is abandoning its blocking stance with decisions on possible Ethereum ETFs.

That means that Ethereum is likely to follow the example of Bitcoin (BTC) in the foreseeable future and find its way onto the classic stock exchange floor as an ETF. This starting point makes professional traders optimistic about the price development for the number two cryptocurrency.

This can be clearly seen in the data on Ethereum options. Here, bulls have taken the lead and are betting on a rising price curve for ETH. It is interesting that they are predicting the rally for June, but are remaining cautious for the current May.

The deadlines are usually the last trading day of a month, i.e. May 31st and June 28th. Ethereum options with a volume of around $3 billion are then due. As of May 31st, puts and calls are almost balanced with a ratio of 0.82, but by June 28th, the ratio shifts to 0.55. With puts, traders secure the right to sell their Ethereum at a fixed price, while calls reserve the right to buy. A put-to-call ratio of over 1 therefore demonstrates pessimistic prospects.

Ethereum is currently trading at around $3,900. The SEC’s change of direction came as a surprise and probably caught some traders off guard. They will therefore try to limit their losses. As a result, high volatility is expected for Ethereum this week leading up to May 31st. But the situation will look different on June 28th.

Then ETH options for $4,000 and above will be clearly in the majority and calls will also be concentrated at the $5,000 mark. In other words: At least for the June 28th deadline, Ethereum options traders are certain that ETH will be trading above 4,000 and see good chances for $5,000.

Conclusion: Ethereum on the way to a new all-time high?

Analyzing the markets for Ethereum options as a basis for price forecasts is just one of many possibilities.

Standard Chartered Bank, for example, is already pricing Ethereum ETFs into its forecasts and sees ETH at $8,000 by the end of the year. It should be clear to you as an investor: Bitcoin ETFs have driven the price curve of BTC with a time delay and no Ethereum ETF has yet been finally approved and given a launch date.

Bitcoin needed about two months after the debut of its ETFs to set a new all-time high. For Ethereum, the all-time high is just under $4,900, which is at the upper end of the corridor that risk-taking professional traders with ETH options are setting by the end of June.

__

(Featured image by  DrawKit Illustrations via Unsplash)

DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.

This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.

First published in BLOCK-BUILDERS.DE. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us