Ethereum (ETH) is down nearly 1% on Monday as exchanges have begun confirming Tuesday as the launch date for ETH ETFs. Considering the ETH ETF launch and the upcoming Bitcoin Conference, this week could prove crucial for Ethereum.
Ethereum may be set for an explosive week ahead with several potential bullish catalysts on the horizon:
Ethereum is trading around $3,460 on Monday, down about 1% on the day. In the past 24 hours, ETH has seen $39.87 million in liquidations, with long and short liquidations accounting for 76% and 24%, respectively.
Ethereum is expected to see increased volatility this week following Tuesday's potential launch of ETH ETFs. This is evident in ETH options' implied volatility, which jumped from 56% to 70% last week, according to data from Deribit.
In addition, ETH options with a notional value of $1.89 billion will expire on Friday. The strike price of these options is heavily concentrated around $3,700, with a Put/Call Ratio (PCR) of 0.45. Since the PCR favors calls, it signifies that most traders are bullish, betting on the price of ETH to rise above $3,700 before the month ends.
End-of-month options expiry has triggered a significant decrease in ETH options open interest in the past two months. If a similar move occurs this time around, it may signify uncertainty among ETH investors. ETH futures open interest declining slightly by 1% in the past 24 hours also aligns with the uncertainty among options traders.
Another key metric to watch is the ETH futures Long/Short Ratio, which is at 0.88. This indicates that a larger portion of ETH futures traders are bearish.
ETH/USDT 12-hour chart
With uncertainty brewing in the market despite the confirmation of ETH ETFs' launch, the bullish sentiment from inflows may not be able to trigger a massive rally this week, as many predict. On the upside, ETH could rise by 8% to the $3,731 key level while finding support around $3,205 on the downside.
Ethereum is a decentralized open-source blockchain with smart contracts functionality. Serving as the basal network for the Ether (ETH) cryptocurrency, it is the second largest crypto and largest altcoin by market capitalization. The Ethereum network is tailored for scalability, programmability, security, and decentralization, attributes that make it popular among developers.
Ethereum uses decentralized blockchain technology, where developers can build and deploy applications that are independent of the central authority. To make this easier, the network has a programming language in place, which helps users create self-executing smart contracts. A smart contract is basically a code that can be verified and allows inter-user transactions.
Staking is a process where investors grow their portfolios by locking their assets for a specified duration instead of selling them. It is used by most blockchains, especially the ones that employ Proof-of-Stake (PoS) mechanism, with users earning rewards as an incentive for committing their tokens. For most long-term cryptocurrency holders, staking is a strategy to make passive income from your assets, putting them to work in exchange for reward generation.
Ethereum transitioned from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) mechanism in an event christened “The Merge.” The transformation came as the network wanted to achieve more security, cut down on energy consumption by 99.95%, and execute new scaling solutions with a possible threshold of 100,000 transactions per second. With PoS, there are less entry barriers for miners considering the reduced energy demands.