Market participants are showing optimism towards Ethereum, as indicated by the rise in open interest for call options on the digital asset, according to analysts at QCP Capital.
Experts observed that on May 27, ETH “rose from $3810 to $3940, likely due to comments from [presidential candidate] Donald Trump in support of cryptocurrencies.” At the time of writing, the coin is trading at $3890.
The positive momentum of the coin is also supported by the narrative of potential approval of spot exchange-traded funds in the US, according to QCP Capital. On May 23, the SEC approved 19b-4 filings from ETF issuers.
“Despite a structurally positive outlook for Ethereum, we do not expect a significant breakthrough until we get more clarity on S-1 approvals and inflow data. It should only be a matter of time,” the publication states.
According to data from the derivatives exchange Deribit, at the time of writing, the put/call ratio for Ethereum options across all expiration dates stands at 0.59.
This figure indicates a predominance of call positions, suggesting bullish sentiment.
Analysts added that the implied volatility for short-term call options is higher than for put options. This situation implies that the market expects upward price movement or increased demand for calls.
Until S-1 approval, the open interest volume on ETH may “remain 15-20% higher than that of Bitcoin,” according to QCP Capital. They believe the ratio of Ethereum options is likely to remain in favor of calls.
Previously, Arthur Cheong, founder and CEO of DeFiance Capital, suggested that the price of the second-largest cryptocurrency by market capitalization could rise to $4500 even before the launch of spot exchange-traded funds.
JPMorgan has described the regulator’s approval of an Ethereum ETF as a political decision ahead of the US presidential elections.
MicroStrategy founder Michael Saylor saw advantages for Bitcoin in the launch of ETH funds.