Ethereum options traders are placing big bets on an ETH rally in June as EIP-1559 approaches.
The price of Ethereum (ETH) continues to rise, reaching $ 2,000 on Friday, thanks to strong technical momentum following a high-profile announcement from Visa.
Visa will allow its partners to use USD Coin (USDC) on the Ethereum blockchain network to resolve transactions.
Since then, interest in Ethereum in both futures and options markets has seen an increase approaching a month’s high of $ 7 billion.
Options market for Ethereum extremely optimistic
According to Cantering Clark, a cryptocurrency trader and analyst, the Ethereum options market is showing big bets towards June.
The trade price with the highest open position is $ 3,200. While this does not necessarily mean that ETH is likely to hit $ 3,200, it does indicate a significant interest at this price level. The trader said:
Is $ ETH the start of the season? The options market is making big bets until June. Over 3200 correct rallies there is a target board.
While there may be multiple reasons for investors to expect ETH to exceed $ 3,000 by June, one of the biggest factors is the much-anticipated EIP-1559 upgrade.
EIP-1559 will go live in July 2021, which will overhaul the current fee structure of the Ethereum blockchain.
Simply put, the proposal burns the fees paid in ETH instead of paying miners, which says that advocates need to balance fees for trading on the Ethereum blockchain. As Cointelegraph reported, the cost of using blockchain has increased by 77% in the past few days in line with the 31% increase in Ether price.
EIP-1559 essentially burns part of the ETH paid for the transaction, which should reduce the circulating supply of ETH and thus put upward pressure on its value.
This means traders are waiting for a rally to enter the implementation phase, as many options targeting the June strike price will expire just before the implementation of the EIP-1559.
Large ETH exits are also detected
Meanwhile, CryptoQuant’s CEO, Ki Young Ju, points out that Ethereum has seen huge booms in the past few days.
Earlier this week, he stated that 400,000 ETH is leaving Coinbase, which may indicate an increase in institutional interest in ETH:
A few days ago, 400k $ ETH came out from Coinbase. Speculative forecast, institutions are now buying ETH.
Exits often point to strong accumulation by institutions and high net worth individuals because when whales buy cryptocurrencies on an exchange, they often move their assets to self-hosted wallets.
Therefore, the view is generally optimistic for Ethereum over the next few months, as data on the positive chain supports a strong fundamental catalyst in EIP-1559.
On top of that, the number of active addresses continues to increase, with foreign exchange reserves constantly falling, indicating increased user activity and ETH demand.
Glassnode also reported that the number of non-zero addresses is rising to a new peak, indicating that user activity is on the rise.
The researchers at Glassnode said:
The Address Number with a balance in Ethereum has just reached ATH with 56,543,380.