A positive outlook for Ethereum is emerging for early 2024, according to data from the Deribit derivatives exchange, indicating increased investor confidence in the digital asset’s potential appreciation. The analysis reveals a growing number of outstanding calls compared to puts in ether options open interest ahead of the end-of-January expiry date.
Deribit Chief Commercial Officer Luuk Strijer highlighted the significance, stating, “If you look at the year-end ether expiry, the put-call ratio is 0.44, which means a ratio of 4.4 puts versus 10 calls. In January 2024, this ratio is, however, 0.19, implying rounded 2 puts for every 10 calls, a much more bullish split.”
A put-call options ratio below one signals optimistic sentiment, implying that there is a higher volume of call options compared to put options. This data indicates a favorable market outlook, with numerous investors foreseeing an increase in Ethereum’s value during the initial months of 2024.
Deribit’s data also reveals that, ahead of the December 29 expiry, there are over twice as many outstanding calls compared to puts. The largest group of call options outstanding for this expiry is at the $2,500 strike price, indicating a considerable number of derivatives traders betting on Ethereum’s price surpassing this level by the end of December.
The approaching end-of-month, quarter, and year expiry date on December 29 has seen a substantial increase in Ethereum options open interest, reaching $3.3 billion out of a total of $7 billion in ether options notional open interest. This increase indicates an expanding presence, increased potential for liquidity, and a rise in the number of sophisticated traders entering the cryptocurrency market. Options, as derivative contracts, provide traders with the privilege to purchase (call option) or sell (put option) the underlying asset at a predetermined price on or before a specific date.
