The world’s second-largest cryptocurrency Ethereum (ETH) is up another 5% in the past 24 hours, reaching $2,000 levels for the first time since May 2022.

The Ether (ETH) price has been on the rise since early July and has risen close to 100% in the past 40 days. The recent price rally comes in anticipation of The Merge’s upgrade next month in September 2022.

This euphoria could last until the Merge event. Data from Glassnode shows that for the very first time in history, the importance of ETH options has surpassed that of BTC’s stake. As Glassnode explains:

For the first time in history, $ETH Options Open Interest at $6.6 Billion Outperformed $BTC Open interest on $4.8 billion. This appears to be the result of traders betting big with call options that the Merge has planned for mid-September.

Thanks to: Glassnode

Ethereum Investors Need to Be Cautious Now

However, the data from the derivatives market suggests that traders expect a drop in prices after the event. According to Glassnode analysts, this could become something of a “sell-the-news” event.

September’s call options are currently overshadowing put options, with Deribit data pointing to a rally to $2,200. However, a month after the planned update, namely September 15-16, the demand for call options drops significantly. This suggests that traders are willing to offer more downside protection and hedge their positions after a strong rally in a very short time. The Glassnode analysts wrote:

“Post-merger, the left tail is pricing in significantly higher implied volatility, indicating that traders pay a premium for ‘sell-the-new’ put option protection post-merger.”

On the other hand, Ethereum co-founder Vitalik Buterin believes the Merge upgrade has yet to be priced in. It will be interesting to see how well ETH holds up after the Merge event. Global macros remain uncertain, with inflation in the US and parts of Europe remaining significantly elevated.

Bhushan is a FinTech enthusiast and has a good flair in understanding financial markets. His interest in economics and finance draws his attention to the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In his spare time, he reads thriller-fiction novels and sometimes explores his culinary skills.

The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or the publication is not responsible for your personal financial loss.

This post Ethereum Hits $2,000, But ETH Derivatives Data Suggest a Quick End to the Rally

was published first on


Write A Comment