Ether makes history as key metric in ETH options outpaces Bitcoin by 32%
Ahead of The Merge, ETH takes over BTC in the options market with an impressive valuation of $5.6 billion
By Shashank Bhardwaj
For the first time, Ether (ETH) overtook Bitcoin (BTC) in the options market as Deribit Ether options open interest (OI), with the former worth $5.6 billion and the latter worth $5.6 billion. $4.6 billion.
The formula for calculating OI is to add all contracts of open trades and subtract contracts when a trade is closed. It is used to understand the strength behind price trends and, by extension, market sentiments. Data from the Deribit exchange, which is the largest BTC and ETH options exchange in the world, shows that ETH options are mostly call options, with a put/call ratio of 0.26. The reason why ETH Put/Call ratios are hitting a yearly low could be attributed to the upcoming transition to a proof-of-stake mechanism, The Merge, which is due to take place in the third week of September.
As a background, under a put option, buyers have the freedom to sell their asset at a pre-determined price on or before a specific date. While the sell buyers are bearish, the buy buyers lean to the opposite side and are more bullish. When a put/call ratio is greater than 0.7 or greater than one, it indicates bearish market sentiment, while a ratio value below 0.7 and close to 0.5 indicates an uptrend. emerges in the market. Thus, it can be seen that ETH OI has an underlying bullish sentiment among traders.