Futures and options markets, which are the agents of large money, are increasingly supporting ether.
ETH$2,651.03
Through Bitcoin
BTC$108,826.70
With a major market shift.
Bitcoin, the leading cryptocurrency by market capitalization, has recently hit a record high of over $110,000. Cryptocurrency has won over 16% this year, drawing strength from macroeconomic factors and persistent inflows into Bitcoin exchange contract funds, according to Coindesk data.
Meanwhile, Ether has been declining 20% this year despite its parent blockchain, Ethereum, and remains in pole position in the Decentralized Financial (DEFI) and tokenization markets.
However, the following indicators show bullish bias in ether, which could result in performance gaps being closed in the short term.
The options show etheric bullish sentiment
The options listed on Deribit show the strong bullish position of the ether compared to Bitcoin.
An option is a derivative agreement that provides the buyer with the right one and is not an obligation to purchase the underlying assets at a given price before a specific date. Call options give you the right to buy and represent a bullish bet on the market, while put options provide protection against price drops.
At the time of writing, both the reversal of the 25-DELTA risk for BTC and ETH are positive in the measure of emotion derived by examining the difference in implicit volatility (demand) between call and PUTS, reflecting bias towards call options.
However, reversal of ETH risk was more expensive than BTC. In other words, traders were relatively bullish towards ether compared to Bitcoin.
Risk inversion for ETH and BTC options. (Deribit/Amberdata)
CME futures are open to interest
According to data source VELO, the expected open interest in CME Bitcoin futures, which represents the dollar value of the number of active contracts, has risen by about 70% since the crash in early April, up over $17 billion.
However, this growth has exceeded $17 billion in the last seven days. CMEs are considered as representatives of institutional activities.
Meanwhile, Ether’s open interest has risen from 186% to $3.15 billion since the crash in early April. Growth has accelerated over the past two weeks.
The divergent tendency indicates that the engine is increasingly leaning towards ether.
ETH CME futures are open to interest. (velo)
Futures Premium and Persistent Funding Rate
The bias in ETH is also evident from the relative richness of the premiums of ether futures.
At the time of writing, one month of ether futures boasted the highest annual premium since January, according to Velo. Meanwhile, Bitcoin futures premium was 8.74%.
ETH and BTC CME futures premium/base. (velo)
Promotions in premiums show optimism and strong buying interest, often showing bullish trends. Therefore, the relative richness of Ether Futures Premium suggests that traders are more bullish towards ETH compared to BTC. After all, ether is an 84% shortfall of the record high that reached during the 2021 Bull Run.
It also has the potential to carry arbitrary (non-directional) trader with low cash.
Similar differences are observed. In offshore exchanges, the annual funding rate is approaching the 8% mark, representing the cost of holding a long position in the ETH permanent future. Meanwhile, BTC’s funding rate is below 5%.