Ethereum Options Trading Volumes Stall
Editor's Note: This article comes fromLongHash Blockchain Information (ID: Kyle Torpey), reprinted by Odaily with authorization.
Editor's Note: This article comes from
LongHash Blockchain Information (ID: Kyle Torpey) LongHash Blockchain Information (ID: Kyle Torpey) , reprinted by Odaily with authorization. After the monthly contract expired on September 25, the ethereum options market came to a standstill. ETH open interest also fell, indicating an overall decrease in trading activity. "Open interest" in futures and options trading refers to the total amount of active contracts in the market. It includes the cumulative number of all contracts held by buyers and sellers, and measures the overall market activity. Since Sept. 1, open interest in ethereum options has shrunk from $544 million to about $362 million, according to Skew. The 33.4% drop in open interest means traders are expecting lower volatility in the short term. The reason: if the number of investors betting bullish or bearish on Ethereum increases, open interest will naturally increase. But over the past four weeks, ethereum’s trading volume in the options market has fallen, and open interest has shrunk. This combination of lower open interest and trading volume suggests that traders are not expecting large price moves in the near term. There are two potential reasons for traders to think that Ethereum will not see a big rise or fall in the short term. First, both bitcoin and ethereum are consolidating below key resistance levels. From a technical analysis point of view, prolonged consolidation below key resistance levels generally points to short-term currency weakness. In the short-term, Ethereum faces two key price levels, $350 and $373. Currently, the price of ETH is stuck between these two levels, and it seems that investors are not expecting any drastic movements in the coin in the near future. The $373 resistance level is critical as it marks the peak of ETH’s June 2019 rally. According to technical analysis, if an asset repeatedly tests previous highs and keeps failing, the price is considered a resistance level. Secondly, in the past three years, the monthly K-line of Bitcoin in September has always received red. (Monthly candles refer to the monthly candlestick chart, which shows ETH’s performance on a monthly time frame.) Given that September is traditionally a low season for bitcoin and ethereum, traders may not be expecting big moves.
