Ethereum (ETH) fell 2% on Saturday amid increased accumulation by long-term investors and ETH ETF issuers launched marketing campaigns for their products. ETH options data reveals important price dynamics that could see ETH reach $4,000 in the coming weeks.
Market Momentum: ETH Long-Term Investors Step Up Accumulation
Long-term ETH (LTH) investors could play a key role in determining the direction of ETH price in the coming months. This is revealed in the ETH Balance by Time Held chart, which shows that 78% of the ETH supply is held by LTH, according to data from IntoTheBlock.
ETH balance by holding period | Source: IntoTheBlock
LTHs are generally understood to be addresses that have held their tokens for more than a year. History shows that strong selling pressure from LTHs often represents the top of a bull cycle.
Considering that LTH holdings are increasing, ETH could still see significant growth in the current cycle.
As previously reported, LTHs may be expecting higher prices from the launch of Ethereum spot ETFs. This is unlike Bitcoin LTHs, who have continued to reduce their holdings since the beginning of the year.
Meanwhile, issuers of spot ETH ETFs have increased their marketing efforts. Asset manager VanEck appears to be leaning towards decentralized applications of its leading smart contract blockchain. In a recent tweet on X, VanEck said, “Ethereum is like an open source app store.”
This follows a series of marketing videos from Bitwise comparing Ethereum to “Big Finance.” Bitwise’s Ryan Rasmussen claimed that Ethereum could be more popular on Wall Street than Bitcoin. “Why? Because most investors don’t own gold. But almost every investor owns technology,” he said.
Unlike Big Finance, Ethereum doesn’t clock out at 4 pm pic.twitter.com/0gCJi3wlXp
— Bitwise (@BitwiseInvest) June 20, 2024
Ethereum Could Hit New Yearly High as Options Contracts Look
Ethereum traded around $3,390 on Saturday, down 2% over the past 24 hours. During that time, $24.84 million worth of ETH leveraged positions were liquidated, with longs accounting for 81% and shorts accounting for 19%.
According to data from Greekslive, over 1.04 million ETH options expired on Friday with a Put/Call Ratio (PCR) of 0.59, a Max Pain point of $3,100, and a notional value of $3.6 billion.
An options contract is a derivative that allows you to buy (call) or sell (put) an underlying asset at a predetermined price on a specific date.
While many predicted that the options expiration would cause high volatility for ETH today, ETH prices have been stable over the past 24 hours. This is consistent with ETH’s implied volatility (IV), which is currently low, below 60% for all major expirations.
“Buying some calls when IV is low is a good option,” Greekslive said.
ETH Options on Deribit
Additionally, the Deribit exchange’s PCR ratio has dropped from around 0.36 at the start of the month to 0.27 at the moment, suggesting that most traders are bullish, especially on the potential launch of spot ETH ETFs. The $4,000 level is an important level to watch as it represents the strike price of over $420 million worth of call options on Deribit.
While ETH price appears to be flat over the weekend, it could start to rise as news of a spot ETH ETF floods the market.
ETH/USDT 4-hour chart | Source: TradingView
ETH needs to clear the $3,629 resistance level – a level it has failed to sustain over the past three weeks – before it can see further upside. A clear break above this level could send ETH up more than 18% to test the $4,093 resistance level and potentially reach a new yearly high.
The $3,203 level could be a key support level for the rally. A breakdown below this level would invalidate the bullish thesis, potentially leading ETH to face a major correction.
You can see ETH price here.
Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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According to Fxstreet
