Bullish Trend, Consolidation, Deviation, Consolidation – This is generally what the Ethereum price chart looked like at the time of writing. The largest alt’s price has remained well below $3500 for six straight days in a row now, and notably, the current consolidation phase is quite congruent to the one observed during mid-August.
That being said, it should also be noted that there is one major difference. During mid-August, ETH’s price leaned more towards the lower range, but this time, the price has evidently been spending more time around the upper range.
Thus, the previous correction period lasted more than 2 weeks. So, should we expect the same this time around too?
Collective Sentiment
The attitude of market participants, to a fair extent, plays a role in solidifying the direction of any on-going trend. Overall, the collective sentiment of Ethereum options traders seemed to be quite positive as of this writing.
At present, there are 1917 DBT contracts expecting ETH’s price to reach $5500 by the end of this year. Leaving aside the long term assertion, these market players are also quite bullish for the short term. As seen from Skew’s chart attached, 1731 contract holders expect Ethereum’s valuation to cross above $4100 by the 17th, while over 612 of them are looking forward to a $3500 breach on the same day.
Either way, it underscores the optimism. Ergo, the odds of Ethereum’s price drifting away from its current $3200 zone towards further highs in the coming week seems to be quite likely at the moment.
However, it’s also worth noting that a good chunk of traders currently have their sales contract open at a strike price of $ 2,800. Even so, this number is not massive enough to overshadow the cumulative number of call contracts, and in hindsight, should not have any momentous impact on the price.
In addition, aggregate Open Interest has also shown signs of recovery in recent times. As per data from Skew, the OI was hovering around $4 million on Deribit on 10 September. At the time of going to press, however, the same portrays a value of over $ 5 billion, indicating the re-emergence of interest. This essentially means that the number of contracts that are being squared off are less than the number of new contracts added.
In retrospect, it’s safe to say that fresh money is pouring into the Ethereum market at this point. The OI on other prominent exchanges like OKEx and bit.com have also parallelly witnessed spikes of late.
Q3’s mood swings
Throughout history, the third quarter has always been pretty hectic for Ethereum. In 2015, 2018 and 2019, ETH’s quarterly RoI remained negative [-75%, -50% and -38%, to be precise]. However, the market has evolved with time.
With the exception of one instance, as noted below, negative returns declined in each subsequent third quarter. In fact, the same was as high as 60% last year around. With more than two weeks to go to the end of the quarter, yields are already posting a healthy 44% on the board.
Thus, if the bullish momentum persists and the buying pressure intensifies in the coming days, a quarterly close above 40% can be anticipated.
Keeping in mind past precedents, collective trader sentiment and the shenanigans of the third quarter, it would be fair to claim that the price of Ethereum would accelerate in the next few days and climb to local highs by the end of this year. this month.
