An analysis of the Ethereum options at Deribit, a crypto derivatives trading platform, shows that the trading community expects ETH prices to fall in the coming days.
A tweet from Skew, a real-time crypto market analysis platform, shows that the majority of Ethereum options traders are bearish and that there is a one-way flow of bearish positions as the number of Call_Sells outperforms Call_Buys at 93% and 3% respectively.
This shows too much that, despite the optimistic mood of coin holders and influential developers, traders are nervous and bearish of the expectation of the developer community, which is optimistic and is betting on the development in the chain to drive a price increase for ETH versus spot rates.
Call_Sells shows the bear pressure in Ethereum
? #OneWayFlow pic.twitter.com/O2NLMLJyaU
– Offset (@skewdotcom) December 11, 2019
The prevailing sentiment is clearly bearish and there are plenty of traders waiting to buy ETH cheap. That explains the high number of Call_Sells.
Call_Sells, unlike Call_Buys, is a bearish signal and occurs when the number of bulls, although optimistic, is bearish in the short term. 1,200 such positions were placed at Deribit, as shown in the screenshot. Because of this, they place bets to buy the coin at lower prices.
In contrast, there were only 44 Call_Buys, which means that the number of traders expecting ETH prices to rise in the short term was less than that of the herd. According to an analyst, Call_Sells indicates a price weakness:
“It means that most of the sales positions are people who want to sell calls, which is a bearish bias in the market (calls are an option to buy. So when you sell, you are actually hoping for lower prices).”
Deribit responds to customer requests
In the first quarter of 2019, the Dutch derivatives trading platform launched Ethereum Options for the first time and enabled European-style vanilla options to be traded.
A vanilla option has no specific characteristics, but like any other options contract, it gives the owner the right, not the obligation, to buy or sell the underlying asset at a set price within a specified time frame.
Institutions use derivatives such as Bitcoin futures and options for risk management and to hedge their portfolios. In response to user demand, Deribit CEO and Founder John Jansen said many OTC desks and customers are excited to see ETH options roll out.
ETH route at $ 130?
When it comes to spot prices, the ETH dangles precariously at USD 144. However, it remains to be seen whether prices will drop below the immediate support line at USD 130 and later at USD 100, as mentioned in previous ETH / USD price analysis.
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