Ethereum Options Surpass Bitcoin Ahead Of Upcoming Merge


Ethereum has outperformed Bitcoin for a while now. The altcoin has managed to grow so fast that it is now around half of the bitcoin market cap despite being 5 years younger. This outperformance has continued through the bull market and even now in the bear market. Ethereum has taken another step forward to surpass Bitcoin by another measure, which is the amount of open interest in the asset.

Open Interest Volatility of Bitcoin

Showed new data from Glassnode file Interesting development When it comes to open interest in both Bitcoin and Ethereum options. Bitcoin naturally dominated this metric due to not only being the number one cryptocurrency in the market but also the digital asset that garners the most attention from investors, both individual and institutional investors.

Ethereum quickly surpassed Bitcoin in this regard as open interest rose to $5.6 billion across all buy and sell options, which is a 47% increase in the last month. It is clear that the popularity of ETH during this time and the recovery in prices helped in its dominance.

On the other hand, Bitcoin continues to trend around normal levels with $4.3 billion in open interest. This puts Ethereum ahead with over 30. With over $2.6 billion in call options and a buy/sell ratio of 0.26, Ethereum investors are showing their hand and it is very bullish.

Ethereum merger stimulates interest

The main reason behind the ETH price rebound was the upcoming merger. After a period of uncertainty over whether the upgrade will happen or will be delayed again, Ethereum developers have come forward to provide an estimated consolidation date.

Ethereum price chart from TradingView.com

ETH price falls below $1,600 | Source: ETHUSD on TradingView.com

With the September 19 date announced, investors began increasing their holdings prior to the merger. With the new month, the consolidation is approaching, and positive feelings about the digital asset have grown. Given that it is arguably one of the biggest updates in the history of cryptocurrency, the positive sentiment from investors is understandable.

The merger is also behind the growth of open interest in Ethereum. The upside is in response to an upgrade that will finally happen next month. However, it is important to note that the merger will see the possibility of withdrawing all of the tied ETH for free. This will cause the ETH supply to flow into the market, which could lead to a drop in the price. At this point, it will not matter how optimistic the trends are but if there is enough demand to absorb this new supply.

This raises the question of whether this will be another “rumor buy, news sell” event. One thing is for sure, if things go Cardano’s way with the Alonzo hard fork, ETH users should prepare for an extension of bear market prices.

Featured image from Coingape, chart from TradingView.com

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