The volatile crypto markets have taken a bite out of Ethereum (ETH) recently, with the second-largest digital asset experiencing over a 10% decline from its recent highs of around $4,000. However, data from crypto analytics firm IntoTheBlock reveals a silver lining – despite this pullback, a staggering 89% of ETH investors are still sitting on unrealized profits. While the majority of holders may be in the green, the on-chain data suggests a potential roadblock could emerge as Ethereum’s price approaches the $3,700 level.
The biggest potential selling pressure seems to lie around the $3,700 threshold, where nearly one million addresses hold more than 4.3 million ETH tokens obtained at these prices. The course of action back to $4,000 might depend on whether these holders hold on or take profits.
Cautious Sentiments In Ethereum Options Market
However, data from analytics firm Blofin suggests more cautious sentiment among traders in the options market. While expectations for high ETH volatility in the short term remain elevated at over 20% for the next 30 days, traders appear less optimistic about Ethereum’s price performance relative to Bitcoin.
Blofin’s analysis shows increasing demand for ETH put options (bets on further price declines) across most tenors except for quarterly contracts. Bearish sentiment is particularly pronounced in front-month options, even as longer-dated calls still hold a modest bullish bias.
Crucially, traders’ pricing of “tail risk” protection for extreme ETH price moves has surged back towards annual averages, significantly outpacing similar hedges for BTC. This suggests investors are bracing for potentially market-moving “events” that could have a significant downside impact on ETH prices.
Some analysts point to the looming U.S. ETF decision itself as a key source of uncertainty. Approval could provide a major boost, but any restrictions or outright rejection could conversely trigger heavy selling pressure. However, as Ethereum continues charting a volatile path, traders and investors alike are keeping a close watch on market dynamics and catalysts that could either turbocharge the leading smart contract platform’s recovery or exacerbate its current slump.
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