Ethereum options traders are placing big bets on an ETH rally in June as EIP-1559 approaches.
On Fridays, following the high-profile Visa announcement, the price of Ether (ETH) continues to rally to $2,000 in strong technical momentum.
As previously reported in Cointelegraph on Sunday, Visa will enable the USD Coin (USDC) network in Ethereum to settle transactions with its partners.
Ethera’s interests have since grown to around $7 billion, the highest in over a month, on both future and options markets.
The options market for Ethereum is particularly optimistic
The Ethereum options market shows large bets headed into june, according to Cantering Clark, the crypto-currency trader and analyst.
The highest open interest strike price is $3,200. While this does not necessarily mean that ETH is likely to reach $3,200, it shows significant interest at this price level. The merchant said:
“Is it the start of $ETH season? Options market making some big bets into June. 3200 strike has a bullseye on it.”
While there may be many reasons for which traders expect ETH to exceed $3,000 by June, the much-anticipated EIP-1559 improvement is one of the biggest factors.
In July 2021 EIP-1559 is scheduled to go live to overhaul Ethereum’s existing fee structure.
Just put, the proposal burns fees paid by ETH instead of miners who claim that proponents should stabilize the fees for the Ethereum blockchain transaction. According to Cointelegraph, the cost of using the blockchain increased 77 percent in recent days, corresponding to a 31 percent price increase in Ether.
In essence, EIP-1559 burns some of the transaction paid ETH, which would decrease the circulating supply of ETH and hence increase its value to pressure.
As a number of June strike price targeted options expire just before the implementation of the EIP-1559, traders expect an event to enter the implementation stage.
Massive ETH outflows are also being spotted
In the meantime, CryptoQuant’s CEO, Ki Young Ju, says Ethereum has witnessed massive exchange outflows in recent days.
Ki noticed earlier this week that 400,000 ETH were leaving Coinbase, a signal that an institutional interest in ETH would increase. He said:
“400k $ETH flowed out from Coinbase a few days ago. Speculative guess, institutions are now buying $ETH.”
Outflows often signal a strong accumulation by institutions and people with high net worth, because whales typically move their holdings into self-hosted wallets when buying cryptocurrencies on an exchange.
Therefore, Ethereum’s view over the next few months is generally optimistic, because positive data supplements the EIP-1559 as a powerful fundamental catalyst.
On top of that, there is a steady decline in the number of active addresses, with exchange reserves showing increasing user activity and demand for ETH. Glassnode also reported that the number of non-zero addresses hit a new high, suggesting that user activity is on the rise.
