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Some crypto options traders are bullish on a declining market by purchasing call options on Ethereum's native token, Ethereum (ETH), despite its recent decline.
Ethereum Investors Invest in $4K Options in Expectation of Record High
According to Amberdata, investors are actively purchasing Ethereum call options on the Deribit exchange with a $4,000 strike price expiring in September.
A call option allows the owner to purchase the underlying asset at a specific price within a specific time period.
By purchasing these call options, investors are betting that the price of Ethereum will rise above $4,000 before the options expire.
“Looking at block flows this week, we see a number of buying activity for the September $4,000 calls,” said Greg Magadini, director of derivatives at Amberdata.
He interpreted this activity as investors predicting that ETH could test and potentially break all-time highs if it breaks above $4,000.
Block transactions, which are typically large orders negotiated privately between two parties, are typically executed by institutional investors, hedge funds and major market participants.
Investors who purchased the $4,000 call option could be expecting a significant market move when the ETFs launch.
This bullish sentiment is also reflected in expectations of increased volatility in the Ethereum market. However, some observers, including JPMorgan analysts, remain skeptical about the excitement surrounding these developments.
Launched in 2015, Ethereum reached an all-time high of over $4,800 in November 2021.
*This is not investment advice.