• Ethereum shills demand $5,000 ETH, and this time derivatives data backs them up

  • Since 2018, Ether (ETH) pundits have been screaming that the $5,000 price is ‘programmed,’ and some have even gone so far as to call for $20,000 in the long run.

    Some of these bullish calls are based on ETH 2.0 staking and the lower inflation caused by EIP-1559.

    At this time in 2017, $BTC was around $2kJust 7 months later it was almost $20kWhat do you think happens when the world wakes up to the APR and deflationary aspect of $ETH that is coming in less than 2 months?$20,000 is programmed IMOThis should be your largest position— Don’t Follow Shardi B If You Hate Money $ (@ShardiB2) May 16, 2021

    The $20,000 estimate corresponds to a $2.36 trillion market capitalization, and even if it is feasible, it appears overly optimistic for the time being.

    On September 20, Ether entered an ascending channel, indicating that $5,000 will become a support level by late November.

    The net value locked growth, or adjusted TVL, on Ethereum network smart contracts is supporting the recent strength. TVL is a metric that measures assets deposited on decentralized applications and is typically driven by lending protocols and DEX exchanges.

    On September 20, Ether entered an ascending channel, indicating that $5,000 will become a support level by late November.

    The net value locked growth, or adjusted TVL, on Ethereum network smart contracts is supporting the recent strength. TVL is a metric that measures assets deposited on decentralized applications and is typically driven by lending protocols and DEX exchanges.

    Ether’s TVL surpassed the previous all-time high of $71 billion on Oct. 16, accumulating a 50% gain in three months until Oct. 31.

    Unfavorable regulatory winds from US lawmakers may be driving investors away from cryptocurrencies. Many states in the United States, including Kentucky, Texas, Alabama, Vermont, New Jersey, and, most recently, New York, have cracked down on cryptocurrency lending.

    Furthermore, the US Commodity Futures Trading Commission launched an investigation into Polymarket, a New York-based decentralized prediction market, in October (CFTC). According to a Bloomberg report on October 23, the agency is assessing whether the decentralized finance (DeFi) application allows its customers to trade binary options and swaps without requiring regulator approval.

    Some investors, on the other hand, believe that positive movement in traditional markets will help to fuel the rally even further. According to data, November was the best performing month for the S&P 500 since 1985.

    Professional traders believe the price of Ethereum will rise.

    To confirm investors’ faith in the $5,000 prophecy coming true, keep an eye on the monthly contract’s premium, also known as “basis.” These fixed-calendar futures, unlike the perpetual contract, do not have a funding rate, so their price will differ greatly from regular spot exchanges.

    A trader can gauge the level of bullishness in the market by measuring the expense gap between futures and the regular spot market. When there is an overabundance of buyer optimism, the three-month futures contract will trade at a 15% or higher annualized premium (basis).

    Not even the 9.5 percent drop in the price of ETH from $4,300 to $3,900 on Oct. 27 was enough to dampen those traders’ spirits. The basis rate is currently at 17 percent, indicating moderate bullishness.

    The options market is moderately bullish.

    On Oct. 29, ether reached an all-time high of $4,460, and the 25 percent delta skew indicates how optimistic traders are. By comparing similar call (buy) and put (sell) options side by side, this indicator provides a reliable “fear and greed” analysis.

    When the premium for neutral-to-bearish put options is greater than the premium for comparable-risk call options, the metric becomes positive. This is commonly referred to as a “fear” scenario. A negative skew, on the other hand, translates to a higher cost of upside protection and indicates bullishness.

    On Oct. 29, ether reached an all-time high of $4,460, and the 25 percent delta skew indicates how optimistic traders are. By comparing similar call (buy) and put (sell) options side by side, this indicator provides a reliable “fear and greed” analysis.

    When the premium for neutral-to-bearish put options is greater than the premium for comparable-risk call options, the metric becomes positive. This is commonly referred to as a “fear” scenario. A negative skew, on the other hand, translates to a higher cost of upside protection and indicates bullishness.

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