Derivatives market participants expect Ether volatility to increase this week as spot trading begins. Ethereum Ethereum
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In an ETF trade Tuesday, one analyst predicted there would likely be selling pressure on the launch day, but then a gradual recovery.
On Friday, the Chicago Board Options Exchange confirmed that several spot Ethereum ETFs from fund managers such as Fidelity, Franklin Templeton, and VanEck will begin trading on Tuesday, July 23. As such, open interest in ether options reflects market expectations that price volatility in the digital asset will soon increase. For example, implied volatility in ether options rose from 56% to 70% last week, according to Deribit data.
According to BRN analyst Valentin Fournier, ether prices could drop immediately following the spot Ethereum ETF deal. “Ethereum could face significant selling pressure early in the week, which may not be immediately offset by the ETF launch,” Fournier told The Block.
This prediction is consistent with the open interest distribution for front-end Ether options, which according to Deribit data has seen the put-call ratio soar to 1.45. This suggests that there are more put options than call options, suggesting that traders are anticipating a potential immediate downside or are looking to hedge against a price decline.
In the long term, Fournier expects the price of Ether to fall to between $2,800 and $3,100 before recovering to $4,000, driven by gradually increasing spot ETF demand.
Ether price expected to rise in the medium to long term
Looking at the weekly and monthly outlook for Ether, derivatives traders see the potential for the digital asset price to rally as the weekend options expiration approaches. According to Deribit data, open interest for Ether options is heavily concentrated around the $3,700 strike price ahead of Friday’s expiration.
The concentration of open interest at the $3,700 strike suggests that traders are betting that the price of Ether will rise above this level by the time the options expire. This positioning is generally considered bullish, as it indicates confidence that the price will move higher.
Fournier recommends maintaining exposure to the potential for positive momentum in Ether, but he still prefers Bitcoin, adding that “the hype and inflows are already priced into the second-largest digital asset by market cap.”
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