ICYMI: Ethereum options' open interest at $6.6 billion surpassed that of Bitcoin at $4.8 billion $ETH $BTC
The on-chain analytics firm notes that, for the first time, Ethereum options' open interest at $6.6 billion surpassed that of Bitcoin at $4.8 billion. This comes as Ethereum derivatives traders continue to make bets on the cryptocurrency in a clear direction, particularly on the impending Merge update.
It notes that while not yet at an all-time high, ETH options open interest is on the verge of doing so, while Bitcoin open interest is still well below the top at just 35% of the ATH. Call options are much larger than put options, as traders envisage ETH prices above $2,200 and a sizable open interest out to $5,000. However, as the maximum pain price is now approximately $1,350, the greatest number of options would expire out of the money.This seems to be a quite sophisticated market positioning, which provides additional proof that institutional capital is being placed into the futures and options markets' maturing liquidity, Glassnode stated.
According to the on-chain analytics firm, the volatility smile has shifted to an extremely bullish bias due to the significant buy-side demand for September expiry ETH call options. On the contrary, the shape and scale of the September to October volatility smile indicates a comparatively decreased demand for ETH exposure through options after the Merge event.
Glassnode indicated in its report that with eyes on the Merge for both upside speculation and a sell-the-news event after the fact, futures traders are pricing ETH at a discount post-Merge and are willing to pay a premium for downside protection.