- The Ethereum network is witnessing a significant uptick in new addresses, reaching the highest daily increase since early October.
- Futures and options market data indicate a return of bullish sentiment for Ethereum, as the second-largest cryptocurrency aims to breach the $2,000 price level.
Ethereum’s Network Surge Points to Potential Bullish Breakout Ahead
In the bustling world of cryptocurrencies, where altcoins like Solana, XRP, and Cardano often capture the spotlight with their market moves, Ethereum has been quietly fortifying its position. In a noteworthy development, the price of Ethereum has ascended by 2% over the past 24 hours, propelling its market capitalization to a robust $221 billion.
A deeper dive into on-chain metrics from Santiment reveals that the climb above the $1,800 mark is not a solitary peak but supported by a surge in network growth. This surge is evidenced by the substantial rise in the creation of new addresses on the Ethereum network, the likes of which have not been seen since October 7th.
The rationale is straightforward: when the network expands consistently and the supply of Ethereum on exchanges dwindles, the stage is set for the price to potentially cross the coveted $2,000 threshold once again.
Ethereum Derivatives Reflect Renewed Optimism
The derivatives market for Ethereum is currently abuzz with bullish sentiment. Despite a 14.7% dip in Ethereum’s price from its April zenith of $2,120, the derivatives market indicators spell an uptrend. Two pivotal metrics – futures premium and options skew – are at the heart of this sentiment.
The futures premium, specifically, has catapulted to a peak that has not been observed in over a year. This premium, gauging the gap between the futures contract prices and the spot market price, is typically in the 5% to 10% range in a healthy market scenario. The Ethereum futures market witnessed a significant leap from a 1% premium on October 23rd to a staggering 7.4% on October 30th, following a 15.7% price rally over a fortnight.
Decoding the Options Market Trends
The options market corroborates this bullish trend. The 25% delta skew of Ether options is a crucial barometer for detecting market sentiment. A negative skew suggests optimism, and the more negative it is, the higher the bullish sentiment. As of late, the skew plunged to a negative 16% on October 27th, the most optimistic stance seen in over a year, showcasing a dramatic shift from the cautious or negative sentiment prevalent up until October 18th.
In sum, the Ethereum network is not just growing; it’s positively thriving. With an increasing number of new participants and a derivatives market that’s flashing green, Ethereum’s path to $2,000 seems to be paved with solid fundamentals and heightened market confidence.