QuickTake:

• Analysts observe a concentration of ether options open interest at $5,000 calls for the end of June.
• This trend indicates a bullish outlook, with traders using call spreads between $4,000 and $5,000 to position for potential price increases.

As June approaches, the ether options market is showing a significant concentration of open interest in $5,000 call options expiring at the end of the month. Analysts interpret this as a bullish signal, with traders strategically using call spreads between $4,000 and $5,000 to anticipate potential price rises.

Ether Options Show Bullish Sentiment

The open interest for ether options, particularly for $5,000 call options expiring at the end of June, suggests that traders are expecting an upward movement in ether’s price. Rachel Lin, co-founder of SynFutures, highlighted that “when we examine derivatives data, we notice that the highest open interest for ether is currently in the June $5,000-call option.” This observation is supported by data from Deribit, a leading derivatives exchange, confirming the largest concentration of ether options open interest at this strike price.

Bullish Call Spreads for June Expiry

A detailed analysis by QCP Capital shows that traders are employing bullish call spreads to profit from ether’s potential price increase within a range of $4,000 to $5,000 by the end of June. The strategy involves buying call options at a $4,000 strike price and selling call options at a $5,000 strike price, both expiring at the end of June 2024. QCP Capital analysts noted, “The desk observes bullishness in ether, with sizeable buyers of $4,000 to $5,000 ether call spreads for end-June 2024.”

Put-Call Ratio Reflects Bullish Sentiment

Rachel Lin also pointed out that ether open interest is “65% for calls versus 35% for puts,” aligning with Deribit’s data, which shows a put-call ratio of 0.56 for the end-of-June expiry. A put-call ratio below one indicates a higher volume of call options relative to put options, signifying a bullish market sentiment. Lin added, “The options market has a bullish outlook for June, even as the spot market consolidates, and if the current trend persists, we may be on the brink of another bullish rally in the near future.”

Hedging Strategies Amid Bullish Sentiment

Despite the overall bullish sentiment, there has been a noticeable increase in the put-call ratio for ether options over the past week, according to The Block’s Data Dashboard. This rise in the put-call ratio comes in the wake of the U.S. Securities and Exchange Commission (SEC) approving, but not launching, spot ether exchange-traded funds (ETFs). This suggests that some traders are considering hedging strategies to protect against potential downsides if the launch of these financial products is delayed.

Implications for the Crypto Market

The concentration of open interest in $5,000 call options for ether indicates that traders are positioning themselves for a significant price rise. This strategy, coupled with the bullish sentiment in the options market, reflects optimism about ether’s price trajectory. However, the increasing put-call ratio also highlights that traders are preparing for potential volatility and downside risks, especially in light of regulatory developments.

Conclusion

The ether options market’s focus on $5,000 calls for the end of June expiry underscores a bullish outlook among traders. The use of call spreads between $4,000 and $5,000 suggests that market participants are anticipating a notable price increase. While the put-call ratio indicates some level of caution, the overall sentiment remains positive. As June unfolds, the crypto community will be closely watching these developments to gauge the future direction of ether’s price.