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Ether (ETH) has been grappling with the $3,600 level for the past three days, yet it seems traders may have overlooked the fact that the ETH price has soared by 58.8% since February. While some market participants attribute the limited upside to uncertainty surrounding the likelihood of a spot Ether exchange-traded fund (ETF) being approved in the U.S., others contend that the surge in Ether futures open interest indicates strong demand from institutional investors.

The debate continues over the implications of the indictment by the United States Justice Department against the cryptocurrency exchange KuCoin. On one hand, the indictment is viewed as a negative for the industry due to the resulting tighter regulatory landscape. However, some argue that this event actually improves the prospects for the approval of a spot Ether ETF by May 25, the date by which the U.S. Securities and Exchange Commission (SEC) is expected to issue its final decision.

A complaint filed on March 26 by the U.S. Commodity Futures Trading Commission (CFTC) against KuCoin for illegal trading activities notably identified Bitcoin (BTC), Ether, and Litecoin (LTC) as digital assets that are commodities, falling firmly under the CFTCs jurisdiction. This stance appears to directly challenge the SECs assertions that Ether could be considered a security.

BlackRock CEO Larry Fink remarked in a March 27 interview on FOX Business that listing an Ether ETF could still be feasible even if the asset is classified as a security by regulators, as reported by Unchained Crypto. Meanwhile, in a March 27 update on the X social network, Bloomberg senior ETF analyst James Seyffart reiterated his prediction of a denial in May, noting that the CFTC has recognized Ether as a commodity since at least February 2021, when they allowed CME Ethereum futures to begin trading.

The growth of the Ether futures market is undoubtedly a positive development, as increased liquidity, particularly in the regulated Chicago Mercantile Exchange (CME) market, facilitates participation by hedge funds and large asset managers. However, the fact that aggregate Ether futures open interest achieved a new record high on March 28 should not be immediately interpreted as a bullish indicator.

It is important to note that Binance leads the pack, amassing $4.55 billion in ETH futures market positions, with Bybit trailing at $2.4 billion. Meanwhile, the open interest in CME Ether futures currently sits at $1.3 billion. Thus, attributing the recent surge solely to institutional investor interest would be oversimplifying the matter.

Moreover, in every derivatives market, the volume of long positions, those wagering on a price increase, invariably equals the volume of short positions, those betting on a decline. However, the demand for leverage can serve as an indicator of the market's bullish or bearish sentiment.

Perpetual contracts, or inverse swaps, include a rate that adjusts based on the demand imbalance for leverage. A positive funding rate indicates increased demand for bullish leverage positions, whereas a negative rate suggests a preference for bearish positions.

Recent data indicates a rise in the demand for leveraged long positions in ETH, with the current funding rate at 0.04%, or roughly 0.8% on a weekly basis. Typically, rates above 1.2% per week signal excessive optimism, suggesting that traders are presently moderately bullish.

To gauge professional traders sentiment more accurately, one should examine data from the Ether options market. The 25% delta skew provides insight into whether arbitrage desks and market makers are charging more for upward or downward protection. Specifically, a skew metric above 7% suggests expectations of a price decline, whereas excitement in the market usually results in a negative skew below -7%.

Related: Covered call options strategy, explained

The Ether option delta skew indicates balanced pricing between call and put options, aligning with a neutral market stance. However, a comparison with data from March 21, when the ETH skew metric showed signs of optimism, suggests that traders are now less optimistic about Ether's potential to surpass the $3,800 mark.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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Ethereum futures open interest at all-time high Bullish or bearish? - Cointelegraph

Ethereums network is strained as blob transaction demand surges, pushing capacity to its limits due to the popularity of inscriptions.

Blobs are a feature that was introduced following the Ethereum networks Dencun upgrade earlier this month.

The upgrade, which aimed to reduce the cost of Layer 2 transactions by substituting the traditional calldata method with blob transactions, has evidently succeeded in its objective. It has made transactions cheaper for end users by enabling Layer 2 solutions like Arbitrum, Optimism, Base, and Linea to utilize blobs for posting transactions.

Reports indicate that the rate of blob transactions on Ethereum has surged, exceeding the networks set capacity, demonstrating the immediate impact of the Dencun upgrade. Adding inscriptions on blobs inspired by Bitcoin Ordinals allows users to embed unique fungible and non-fungible artifacts within these transactions.

The function has introduced a new dimension of utility for blobs, even though they are ephemeral and are removed from the network after 18 days. However, full archival nodes can retain this data indefinitely.

A recent analysis from Dune Analytics reveals a notable trend: 40% of blob transactions are now related to inscriptions. The study shows a significant utilization rate, demonstrating the highest usage among various Ethereum (ETH) L2 solutions.

Currently, the network faces a blob contention, with blobs operating at a 100% utilization rate. The situation is further compounded by a considerable backlog in the mempool, where 160 blobs await processing. Given Ethereums current capacity to include only up to six blobs per block, the backlog is roughly 40 times higher than the network can accommodate in a single block.

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Ethereum blobs pushed to utilization limit due to inscriptions - crypto.news

The London Stock Exchange is reportedly set to launch Bitcoin (BTC) and Ethereum (ETH) exchange-traded notes (ETN) market. Indeed, the United Kingdoms main stock exchange issued a market notice Monday stating that Crypto ETNs will be launched on May 28th, 2024.

The exchange previously announced that it was set to accept applications for Bitcoin and Ethereum ETNs earlier this month. Additionally, the notice states that these applications can be made starting on April 8th. Moreover, the announcement states that they will be subject to approval by the countrys Financial Conduct Authority (FCA).

JUST IN: London Stock Exchange to launch #Bitcoin and Ethereum exchange traded notes (ETN) market.

Also Read: London Stock Exchange to Accept Bitcoin and Ethereum ETN Applications

In the United States, the digital asset market saw the inaugural approval of Spot Bitcoin ETFs. Indeed, the US Securities and Exchange Commission (SEC) greenlit the investment product that has been immensely successful just 50 days into trading. Subsequently, the UK is set to explore digital asset exchange-traded markets through a recent announcement.

The London Stock Exchange has announced it will launch the Bitcoin and Ethereum ETN market in a notice issued Monday. The decision arrived just weeks after the stock exchange announced its intention to accept ETN applications for the two digital assets.

Crypto ETNs will allow UK-based investors to trade securities that track digital assets on the exchange. In the recent announcement, the exchange stated that it would accept ETN applications through the second quarter of the year. Alternatively, applications will not be accepted beyond April 15th, according to the document.

Also Read: Bank of London Officially Submits Bid for Silicon Valley Bank UK

Additionally, the notice includes a May 28th, 2024 launch date for the ETNs. The exchange stated this date would enable the maximum number of issuers to be present in the market on the first day of trading.

The decision arrived just months after Spot Bitcoin ETFs have proven to be immensely successful in the United States. Indeed, these products have become some of the most popular funds for asset management giants BlackRock and Fidelity.

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London Stock Exchange to Launch Bitcoin & Ethereum ETN Market - Watcher Guru

The price of Ethereums Ether (ETH) has risen by approximately 4.5% in the last 24 hours to reach $3,500 on March 25. This rebound is part of a larger recovery trend, with Ether gaining about 14.5% from its local low of around $3,050 on March 20.

Let's delve into the factors that have influenced Ether's price gains in recent days.

Ether's latest gains precede a period of accumulation among its richest investors, also known as whales.

According to data resource Glassnode, entities holding between 1,000 and 10,000 ETH have increased their Ether reserves by approximately 1.15% in March. Recently, this accumulation pattern has often been a precursor to significant price surges, as shown below.

Moreover, these accumulation phases have coincided with price declines, suggesting that large-scale investors are currently buying dips, expecting the price to resume its upside.

Today's uptick in Ethereum's price is closely linked to two key on-chain metrics indicating a reduction in ETH's circulating supply.

The percentage of Ether supply locked in its smart contracts has surged to 36.47%, marking the highest level recorded as of March 5.

This locking up reduces the circulating supply available for trading, potentially putting upward pressure on price.

To illustrate, the net change in Ether's supply over a week was approximately -4,000 ETH as of March 25, highlighting a tangible decrease in circulating supply over the past week that could support upward price movement.

Second, Ether's recovery since March 20 aligns with the declines in ETH reserves across all crypto exchanges, as shown below.This trend indicates a growing preference among traders to retain their ETH, opting for long-term holding rather than exchanging it for other assets.

Ethereums ongoing price gains mirror similar rebound moves across the crypto market amidsignals that the Federal Reserve and its major global counterparts will likely start cutting interest rates by June.

Lower interest rates typically reduce the yield (or return) on government bonds, which investors consider as one of the safest investments. This makes bonds less attractive to investors seeking higher returns. In turn, they shift their capital to riskier assets, such as stocks and cryptocurrencies.

Related:Goldman Sachs hedge fund clients are piling back into crypto this year

The Fed hasnt hiked interest rates since July 2023. Since then, the price of Ether has jumped by over 108%. Similarly, the crypto markets valuation on the whole has rallied 114% in the same period, fueled further by the approval of spot Bitcoin exchange-traded funds (ETFs) in the U.S.

Ethers price started rebounding after reaching a support confluence comprising its 50-day exponential moving average (50-day EMA; the red wave in the chart below) at $3,270 and its 0.382 Fibonacci retracement line at around $3,125.

At the time of Ether's bounce, its RSI was around 50, indicating a balanced or neutral sentiment in the market. Interestingly, this trend resembles ETH's bounce in January 2024 (the red bar), which preceded a 90% price rally to around $4,085.

ETH price now eyes a breakout toward $4,000 by April if it decisively closes above its 0.236 Fib line at around $3,500. As mentioned above, failing to do so would risk a sharp pullback toward the support confluence area.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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Why is Ether (ETH) price up today? - Cointelegraph

The quarterly expiration of (BTC) and (ETH) options contracts, valued at billions of dollars, is set to trigger bullish price volatility this Friday at 08:00 UTC on crypto derivatives exchange Deribit.

This event marks one of Deribit's largest expiries, with $15.2 billion worth of contracts set to be settled, according to CoinDesk.

Bitcoin options, which represent 62% of the total notional open interest due for settlement, account for $9.5 billion, while Ether options make up the remaining portion.

The impending expiry will reduce the total notional open interest across all maturities by 40% and 43% for Bitcoin and Ether, respectively. This reduction in open interest is noteworthy as it reflects the dollar value of all active contracts at a given time on Deribit, where a single option contract equals one BTC or one ETH.

According to Deribit's chief commercial officer, the bulk of these options are expected to expire in the money (ITM), which effectively triggers upward pressure or volatility in the market. An ITM call option allows the investor to buy BTC or ETH at a strike price lower than the current market rate, resulting in a profit.

With Bitcoin's market rate around $70,000, roughly $3.9 billion worth of Bitcoin options are on track to expire ITM, constituting 41% of the total quarterly open interest.

Similarly, 15% of ETH's total quarterly open interest, valued at $5.7 billion, is set to expire at ITM. These high levels of ITM expiries, which are unusual compared to previous cycles, may lead to increased market volatility, especially given the recent price rallies in both Bitcoin and Ethereum.

The concept of "max pain" points to the strike price at which the highest number of options (both call and put) would expire worthless, causing maximum financial loss to option buyers. For this quarter's expiry, the max pain points are set at $50,000 for BTC and $2,600 for ETH. Historically, prices have tended to move toward these max pain points before rallying after the expiry, suggesting a pattern that might repeat.

Dealer hedging activities are also expected to contribute to market volatility. David Brickell, head of international distribution at FRNT Financial, highlighted the dealers' gamma positioning. With dealers short around $50 million of gamma, primarily concentrated at the $70,000 strike for Bitcoin, the forced hedging around this level could lead to "whippy, choppy moves" as the expiry approaches.

Gamma refers to the rate of change in an option's delta, which measures the sensitivity of an option's price to changes in the underlying asset's price. Market makers, who typically maintain a neutral exposure while providing liquidity, could amplify price movements through their hedging activities.

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Massive Bitcoin and Ethereum options expiry to trigger market volatility - report - Investing.com