Ethereum futures and options data reflects traders’ mixed emotions on $3.2K ETH price
Ethereum’s price performance in the market has been a rollercoaster similar to what is happening now with Bitcoin. At the beginning of 2021, Ethereum was only priced at under US$ 1000. From there, the price went on an upward trend until it peaked at US$ 4,180 on May 11th of the same year. Afterward, the price went down and by July 20th, Ethereum was worth US$ 1,786 per token.
The value of Ethereum rose again although there were times it went down. However, its value still went on to an upward trajectory until it stopped on November 8th. On that day, Ethereum peaked at an all-time high of US$ 4,818. But once more, it went on a downward trend until dropping to US$ 3,083 as its bottom on January 10th, 2022. As of this writing, Ethereum is now priced at US$ 3,377. Needless to say, these alternating price changes had caused Ethereum traders mixed emotions including futures and options traders.
What is Future Trading in Cryptocurrency?
Crypto Futures are contracts that obligate the trader to buy and sell cryptocurrency assets at a certain date in the future. They are financial securities used to determine the price direction of crypto coins like Bitcoin and Ethereum. The futures trader has an option to hedge the crypto coin value at a particular date in the future. Thus, it is vital that the trader can speculate where the price will go before the futures pre-determined date expires. To start trading futures, one must open an account with a futures broker in the cryptocurrency exchange. Needless to say, if you are interested in Ethereum futures trading, you do not need to purchase the crypto coin.
What do Future Traders think of Ethereum’s market performance?
Most Ethereum Futures traders are anxious about how the cryptocurrency has been moving the last two months. Ethereum reached an all-time peak in November attaining the 4000s range in US dollars but then fell to the 3,000s range in just two months. Once more, it is on the rise again since January 10th of 2022. Despite that, it is still a high rise compared to its price of US$ 775 at the beginning of 2021.
What is Options Trading in Cryptocurrency?
Options trading is where traders purchase premiums which are rights to buy or sell an asset like a cryptocurrency on a certain date at a set price. Both the amount of the asset and the date of the premium are pre-determined. Although these option premiums provide rights to traders to buy and sell assets, they are not under obligation similar to what is done in futures trading.
However, similar to futures, traders are to predict which way the price will go. Just like futures, a trader doesn’t need to own Ethereum or other crypto coins to participate in the trading. They just need to open an options account with a licensed options trading broker in the crypto exchange market.
What do Option Traders think of Ethereum’s market performance?
Unlike Ethereum futures traders, Ethereum option traders are neutral regarding the market performance of the said cryptocurrency. Although Ethereum’s value dropped to US$ 3,083 on January 10th from its highest peak price of US$ 4,818 last November, traders remained indifferent. That is because, after the price drop on January 10th, Ethereum is now rising once more. It is now above US$ 3,300.
Should I buy Ethereum now?
According to experts, now is a great time to buy Ethereum. That is because it is currently 35% down from its highest peak last November 2021. While the price is low, it is the perfect opportunity to buy Ethereum. One of the reasons why Ethereum is still a worthwhile crypto investment is because its fundamentals have not changed. If it can reach US$ 4,000, it can reach it again. Thus, Ethereum is likely to recover once more to its highest peak and may even go beyond it.
The other reason is that it is a great long-term investment. Holding on to crypto coins for long periods is best since the price of these altcoins increases in the long term. As proof, at the beginning of 2021, Ethereum is only US$ 775 per token. But at the beginning of 2022, its value in US dollars is over $3,700 which is a 477% increase. It is predicted that this cryptocurrency may go beyond its highest peak of US$ 4,000 this 2022.
Even if Ethereum is subjected to high volatility, it is likely due to the recent meddling of the US Federal Reserve to combat inflation. However, traders need to keep in mind that Ethereum is not a suitable investment for everyone. That is most especially to those who prefer minimal risk investments. Therefore, if you buy Ethereum now, be sure that you can tolerate the high risks and volatility of the crypto coin.
* We hope this information will help you in your investment process, but this is not investment advice. Every investment carries risk, especially in this industry, so DYOR before making a decision.