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Ethereum ($ETH) is attracting investor attention as capital flows shift away from Bitcoin (BTC), with derivatives market activity indicating strong near-term bullish sentiment for the second-largest cryptocurrency by market cap.
Over the weekend, $ETH saw an increase in open interest alongside increased implied volatility, indicating growing confidence among derivatives traders. This momentum has translated into a significant price rally, with $ETH gaining over 6% in the past 24 hours to trade at a peak of $3,513. In contrast, Bitcoin saw a modest 0.5% decline.
Wintermute analysts highlighted a clear shift in favor of $ETH in their weekly crypto market update. “Flows over the last few sessions have shifted in favor of $ETH, with open interest on exchanges reaching all-time highs over the weekend,” the firm said.
This shift was evident by a sharp increase in implied volatility for $ETH and a 12-month high in the put-call skew, reflecting a growing preference for upside risk. “Large blocks over the weekend included December 27 $ETH call spreads with strike prices ranging from $3,600 to $5,000,” Wintermute reported. The analysts also noted that recent $ETH call contracts were trading at a premium of 8-10 points, which could fuel hedging activity via 10-25 day risk reversals.
$ETH’s bullish momentum has spilled over to altcoins, particularly ERC20 tokens. Over-the-counter (OTC) demand has surged, with the Pepe memecoin emerging as a standout performer. Pepe has gained over 54% in the past two weeks, driven by its growing popularity in Layer 2 ecosystems.
*This is not investment advice.