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November 2, 2023

Ethereum's Network Growth and Derivatives Market Signal Positive Price Outlook

Thando Dlamini
Written byThando DlaminiWriter
Researched byNikos PapadopoulosResearcher

Ethereum (ETH) has been quietly making significant progress amidst the attention-grabbing performances of Solana, XRP, and Cardano in the altcoin market rally. With a 2% increase in the last 24 hours, the ETH price has reached $1839, accompanied by a market cap of $221 billion.

Ethereum's Network Growth and Derivatives Market Signal Positive Price Outlook

Ethereum Network Growth Jumps

According to on-chain data from Santiment, Ethereum's recent surge above the $1,800 mark is supported by a notable rise in the creation of new addresses. In fact, it has reached the highest daily number since October 7th. This long-term trend of network expansion, coupled with a decrease in available supply on exchanges, could potentially propel Ethereum's price ($ETH) to surpass the $2,000 threshold once again.

A Look Into ETH Derivatives Market

The movement of ETH by Vitalik Buterin to Coinbase has sparked discussions around the ETH price rally. Furthermore, Ethereum derivatives data indicates a growing bullish sentiment despite recent selling pressure.

ETH has experienced a 14.7% decline in price, dropping from its peak at $2,120 on April 16, 2023. However, two key derivatives metrics suggest a significant increase in investor bullishness, reaching levels not seen in over a year.

Firstly, the Ether futures premium, which measures the variation between two-month futures contracts and the spot price, has surged to its highest point in over a year. In a robust market, the annualized premium, also known as the basis rate, generally falls within the range of 5% to 10%. This surge in the metric follows a 15.7% price rally for ETH over a two-week period.

Additionally, analysis of the options market provides further insights. The 25% delta skew in Ether options serves as an indicator of when arbitrage desks and market makers might overcharge for upside or downside protection. Notably, the Ether options 25% delta skew reached a negative 16% level on October 27, marking the lowest point in over 12 months. During this period, protective put (sell) options were trading at a discount, reflecting excessive optimism among traders.

In conclusion, Ethereum's recent progress in network growth and the derivatives market suggests a positive outlook for its price. With the potential to surpass the $2,000 threshold once again, investors and traders should closely monitor Ethereum's performance and take advantage of the opportunities it presents.

About the author
Thando Dlamini
Thando Dlamini
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Thando Dlamini, a vivacious 22-year-old from South Africa, seamlessly blends her love for the vibrant world of online casinos with her meticulous localization skills, making the digital gaming experience truly South African.

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