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Ether (ETH) has taken over Bitcoin (BTC) in the options market for the first time ever as Deribit’s Ether options open interest (OI) is worth $5.6 billion, surpassing Bitcoin options OI of $4.6 billion . 32%.
OI is calculated by adding all contracts from open deals and subtracting contracts when deals are closed. It is used as an indicator to determine the strength of market sentiment and price trends. Deribit is the world’s largest his BTC and ETH options exchange, with over 90% of his global trading volume.
Data from the Deribit exchange highlights that ETH options are mostly call options, with a put/call ratio of 0.26. As the merge date approaches, ETH’s put/call ratio hits new annual lows.
A put option gives the buyer the right, but not the obligation, to sell the underlying asset at a specified price on or before a specified date. Overall, put buyers are implicitly bearish, while call he option traders are bullish.
A put/call ratio above 0.7 or above 1 indicates bearish market sentiment. On the other hand, put/call ratio values below 0.7 and approaching 0.5 indicate a bullish trend.
Related: Ethereum Merge: How will the PoS migration affect the ETH ecosystem?
The recent surge in ETH OI in the options market with underlying bullish sentiment among traders has been attributed to the upcoming merge scheduled for the third week of September.
While ETH continues to gain dominance in the options market, quarterly ETH futures contracts due to expire in December 2022 are in backwardation, where futures prices are lower than spot prices. Ether spot and futures prices rose to -$8 on Monday. While this may seem like a bearish outlook, BTC surged 15% after his June price pullback.
Aside from growing bullish expectations for the upcoming Proof of Stake (PoS) transition, analysts also point to possible airdrop scenarios should the chain split. A Galois Capital survey found that 33.1% of his respondents believed the upgrade would lead to a hard fork, while 53.7% expected a smooth network transition.
