Is Ether Expected to Decline? Options Market Shows Short-Term Pessimism
Story Highlights
Data from options trading suggests that investors are increasingly betting on a drop in the price of Ether.
While there are short-term concerns, some investors remain optimistic about the long-term future of Ether.
Recent market movements, including an increase in hedging strategies, indicate a cautious approach to Ether in the short term.
Navigating the cryptocurrency world can be challenging, but valuable insights can make a difference. Amberdata, a trusted source of digital currency information, has revealed key insights into the future of Ether.
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To understand the intricacies of Ether options, let’s delve into the article.
Betting on a Decline in Ether
Amberdata’s recent findings provide insights into the current sentiment in the Ether options market. The one-week call-put skew for Ether, which measures the demand for calls versus puts expiring in seven days, has reached a record low of nearly -8. This significant drop, the lowest in over three months, indicates a prevailing inclination to bet on a decline in Ether.
As we approach April, there is a surge in short-term bearish bets on Ether. More participants are predicting a price drop, resulting in a negative skew across one-, two-, and three-month intervals, signaling a collective sentiment leaning towards a downturn.
However, despite these short-term concerns, there is a resilient group of believers who anticipate a positive future for Ether in the long run. Their optimism persists, painting a hopeful picture of a recovery beyond the immediate challenges.
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Insights from Imran Lakha
Imran Lakha, the founder of Options Insights, has highlighted the sudden increase in the skew of ETH. He attributes this to the influence of call selling flows and the breach of key technical support at $2,400. Lakha emphasizes the critical level for ETH at $2,150, suggesting that breaking this level could lead to further declines.
However, recent market movements indicate a cautious outlook for ETH in the short term, with a growing demand for hedging strategies.
Understanding the Market Movements
Amidst the fluctuations in the market, Ether is currently trading at $2,220 with a 1% daily dip. The increasing demand for hedging strategies adds an extra layer of caution for investors.