Ethereum price index, 12-hour chart, in USD. Source: TradingView
Some critics point out that the transition to proof-of-work (PoW) mining has been delayed for many years, and that the merger itself does not address scalability issues. The shift of the network to parallel computing (blocking) is expected to occur in 2023 or early 2024.
The Ethereum double-headed EIP-1559 destruction mechanism launched in August 2021 is particularly important to promote ETH towards scarcity like digital currency analysts and influencers. KrisKay explained:
All 11% of the $ETH supply is now staked.
~2% of $ETH supply is now burned
~100% of $ETH is an ultra-sound currency
- Chris Kay | DeFi Donuts (@thekriskay) August 15, 2022
While the need to support costly energy-intensive mining operations has been removed, many blame the anticipated move to the ethereum beacon chain. Next, [DrBitcoinMD" highlighted the inability of stakers to withdraw their tokens due to the unsustainable temporary price reduction of ETH.
Anyone who still puts their faith behind stupid Russian pseudo-intellectuals and an ethereum Ponzi scheme deserves what's to come. pic.twitter.com/gjxHXdzuSK
- Doc (@DrBitcoinMD) August 11, 2022
There is no doubt that the reduction in the number of tokens available for sale has had an impact on supply, especially after ETH`s recent 82.8% rally. Even so, these investors are still aware of the ETH2.0 pledge risks and do not promise instant transfers after the merger.
Options Market Reflects Unusual Sentiment
Investors should check Ether. Based on derivatives market data, we can understand where whales and arbitrage desks are. Whenever a trader charges too much for upside or downside protection, 25% of traders deltaskew this is an important signal.
If these market participants were concerned about a collapse in the price of Ether, the skew index would exceed 12%. On the other hand, a negative bias of 12% is reflected in general excitement.
30-day Ether option 25ltaskew: Source: Laevitas.ch
The Slope Index has remained neutral since ETH`s rally began, even after testing the $2,000 resistance on Aug. 14. The lack of improvement in market sentiment is a bit of a concern, as ETH currently has options traders assessing similar upside and downside price action risks.
Related: Era's Whale Address Transfers 145,000 ETH Weeks Before Ethereum ICO Merger
Meanwhile, bulls and bears data show a lack of confidence at the $2,000 level. The index excludes external factors that may only affect the options market. It also collects data from exchange clients' spot positions, perpetual contracts and quarterly futures contracts to better understand where professional traders are positioned.
Different exchanges occasionally behave differently, so readers should focus on changes rather than absolute figures.
There is too much room for top traders on exchanges. Source: Coinglass
Despite an 18% increase from Aug. 4 to Aug. 15, according to the long-short indicator ETH, professional traders saw a slight decline in leveraged long positions. The ratio of Binance traders has improved significantly from 1.16, but it is less than the starting level around 1.12.
At the same time, the long-short ratio of Huobi has dropped slightly, and the index has risen from 0.98 to the current 0.96 in 11 days. Finally, this indicator is the OKX exchange peaking at 1.70, but only since August 4. August 15 On the 46th, it rose slightly to 15.52. So, on average, traders are not confident enough to maintain leveraged bullish positions.
While ETH is up 18% since Aug. 4, there has been no significant change in the leveraged positions of whales and market makers. If options traders treat ETH upside and downside price risk similarly, there may be a reason for this. For example, strong support for proof-of-work forks will put pressure on ETH.
One thing is for sure, currently professional traders do not believe that the $2,000 resistance level will break at will.
