Traders sceptical about ethereum's upside potential

The latest data from the Decentralised Finance (DeFi) options protocol reportedly shows that traders are more sceptical about the performance of ethereum (ETH) than bitcoin (BTC), with Derive founder Nick Forster reporting on October 13 that there were almost 2.5 times as many sold calls on ETH as bought calls, suggesting that traders believe that ETH's upside potential is limited.

The report cited data from Derive showing that as of the end of September, 34.5 percent of Ether calls had been sold compared to 15.5 percent bought. This suggests that traders expect the price of ETH to either remain unchanged or fall. forster notes that the relatively small number of calls bought supports the view that the potential for ETH to rise sharply in the short term may be limited.

In contrast, Forster highlights the large number of bitcoin open interest (OI) contracts with strike prices of $75,000 and $100,000, suggesting that traders are preparing for significant volatility. These levels could become key barriers or breakout points. the deviation of open positions in ETH, with almost 2.5 times more calls sold than bought, further suggests that traders currently see limited upside for ETH.

Forster also mentioned that the divergence between bitcoin and ethereum will be key to watch as the 5 November US presidential election approaches. At the time of publication, ethereum was trading at $2,615, up 7 percent since Oct. 7, according to TradingView.

Despite the scepticism, other data suggests that Ether traders have long-term confidence in Ether. on 8 October, Cointelegraph reported that nearly a third of Ether has been pledged, suggesting long-term interest in the crypto-asset and the returns it offers. IntoTheBlock, an on-chain data provider, said 28.9 per cent of Ether had been pledged at the time.

This article does not contain investment advice or recommendations. Every investment and trading behaviour involves risk and readers should do their own research when making decisions.