Ethereum futures and options data reflect investors’ growing confidence in ETH price

Jan 27, 2023 | wjb news

From January 14 to January 21, the price of ETH rose by 16%, reaching the highest value of US $1680, and then suffered a rejection of 5.4%. It is puzzling that the same level of friction resistance caused a large adjustment at the end of August and the beginning of November 2

On the one hand, traders are happy that the Ether has increased by 35.5% so far this year, but the constant adjustment after the $1680 friction resistance retest is likely to reduce investors' confidence.

After the struggling digital currency enterprise Digital Currency Group (DCG) encountered a large number of legal risks this week, the negative news flow is likely to limit the appetite of the investors in the ether currency. On January 23, a group of debtors of Genesis Capital filed a lawsuit accusing them of violating the federal securities law. In addition, the appellant also accused the credit company of making false statements and misleading statements as part of the potential of fraud and the current planning of digital currency borrowers.

On January 22, after the Uniswap community fully supported the proposal of "ambient temperature check" to deploy the Uniswap v3 protocol to BNB Chain, the Ethereum holder had a new worry. About 80% of Uniswap UNI remediation dynamic password holders voted to deploy the additional version number of the blockchain technology exchange protocol.

On the positive side, Ethereum developers created an interface test for the upcoming Shanghai network upgrade. According to Marius Van Der Wijden, the real estate agent of Ethereum, the test network may be established to assess the withdrawal of pledge loans that are currently banned online. More than 14.5 million ETH (with a use value of 23 billion US dollars) has been deposited into the Ethereum pledge contract, and has been publicly criticized after several delays in cash withdrawal.

Let's take a look at the data information of the Ether derivative products, and know whether the rejection of the price of US $1680 has seriously affected the sentiment of investors in data encryption.

ETH futures finally entered the neutral zone

Because of the price difference between the spot market and the stock market, investors generally prevent the first quarter of futures. At the same time, technical professional traders prefer these tools because they can prevent the fluctuation of capital interest rate in permanent futures contracts.

In the education market, the annual interest rate insurance cost of three-month futures needs to be between 4% and 8% to cover the cost and related risks. When the futures transaction price is lower than the basic spot market, it indicates that the financial leverage customers lack confidence, which is a bullish indicator value.

The figure shows that derivatives dealers will not be short again, because the equity premium of Ethereum futures has reached the 4% access threshold of the neutral sales market. Therefore, the duo can celebrate the conversion of the index to an appropriate equity premium, but this does not mean that the traders predict that the price increase will lead to an immediate conclusion.

For these reasons, traders should analyze the options market of Ethereum to understand how dolphins and market makers price the probability of future price fluctuations.

The stock index optioners are very satisfied with the downside risk

When the market and hedging arbitrage units maintain too many charging standards for rising or falling, the delta error of 25% is a significant sign.

In the bear market, the investors of stock index futures put forward a higher price countervailing probability, resulting in an increase in the error index value of more than 10%. On the other hand, the rising sales market focuses on sending the skewed index value below - 10%, which means that the call put option is discounted.

In the past week, the delta error remained around 0%, which indicates that the stock index option holders of Ethereum showed a neutral attitude. This is quite different from the end of 2022. At that time, 25% of the skewed index value struggled around 18%, which shows that people lack confidence in bearing the downward pressure.

Finally, both the stock index futures and the futures sales market emphasize that the pro-trader will change from a neutral attitude to a neutral attitude, which means that it is not easy to feel uncomfortable after being rejected at $1680 and then making adjustments.

Therefore, it is beneficial for both sides of the Ether coin, because the negative news flow cannot prevent the 35.5% increase so far this year, and the requirement of using futures contracts to short is still small.