- ETH Options traders have begun bullish positioning for the Pectra upgrade
- Markets are pricing a 14% chance altcoin would hit $4k by the end of April
Traders have begun positioning for Ethereum’s Pectra upgrade, raising questions about whether the historical “buy the rumor, sell the news” idea will play out again. As it stands, the upgrade is scheduled for early April if the tesnet set for 24 February and 5 March goes as planned.
According to the crypto options trading desk QCP Capital, traders’ positioning leaned on this bullish play, at press time. The firm noted,
“Traders are positioning for another volatility event, with volatility skewed in favor of calls from March 28 onward. This could set the stage for the next major positioning theme.”
Will Pectra upgrade pump ETH?
QCP Capital added that previous upgrades have always been front-run before sell-offs after the events. The only exception would be the Shanghai upgrade in April 2024. The firm highlighted,
“The Merge (Sep 2022) → Classic “buy the rumor, sell the news”. ETH rallied 100%+ from June lows before selling off post-event. Shanghai (Apr 2023) → Markets feared excess supply, but when selling pressure failed to materialize, ETH climbed 30% in the following months.”
For those unfamiliar, the Pectra upgrade aims to ship eleven key features, including blob expansion and smart wallet capabilities.
The aforementioned scalability efforts have begun to pay off too. For instance, recently, Ethereum’s average transaction cost has been rivalling Solana with sub 1 gwei in gas charges.
However, despite these efforts, there hasn’t been a notable uptick in demand for L1. Hence, whether the Pectra upgrade will accelerate L1 demand remains to be seen.
Will ETH reclaim $4k?
That being said, in the last 24 hours, calls (bullish bets) eyeing the $3.2k and $3k price targets were the most bought.
For protection, puts (bearish bets) were piled at the $2k target. This suggested that Options traders, in the short term, expected a surge to $3.2k with $2k as support in the wake of extremely bearish moves.
Source: Amberdata
However, the Options market was relatively less optimistic about ETH hitting $4k by the end of April after the Pectra upgrade.
At press time, the traders were only pricing a 14% chance that the king altcoin could reclaim $4,000. The odds of hitting $4k by June jumped to 25%, suggesting that the altcoin had a higher chance of eyeing that level in the summer.
Source: Deribit
Hike in ETH accumulation
Despite ETH’s muted price action, there has been significant accumulation as investors moved ETH off exchanges.
On 5 February alone, 367k ETH were moved from exchanges – A sign of a strong accumulation trend as the altcoin dropped below $3k on the charts.
Source: CryptoQuant
Whether the strong accumulation trend will push ETH’s price higher would depend on improvement in the broader market sentiment.
- ETH Options traders have begun bullish positioning for the Pectra upgrade
- Markets are pricing a 14% chance altcoin would hit $4k by the end of April
Traders have begun positioning for Ethereum’s Pectra upgrade, raising questions about whether the historical “buy the rumor, sell the news” idea will play out again. As it stands, the upgrade is scheduled for early April if the tesnet set for 24 February and 5 March goes as planned.
According to the crypto options trading desk QCP Capital, traders’ positioning leaned on this bullish play, at press time. The firm noted,
“Traders are positioning for another volatility event, with volatility skewed in favor of calls from March 28 onward. This could set the stage for the next major positioning theme.”
Will Pectra upgrade pump ETH?
QCP Capital added that previous upgrades have always been front-run before sell-offs after the events. The only exception would be the Shanghai upgrade in April 2024. The firm highlighted,
“The Merge (Sep 2022) → Classic “buy the rumor, sell the news”. ETH rallied 100%+ from June lows before selling off post-event. Shanghai (Apr 2023) → Markets feared excess supply, but when selling pressure failed to materialize, ETH climbed 30% in the following months.”
For those unfamiliar, the Pectra upgrade aims to ship eleven key features, including blob expansion and smart wallet capabilities.
The aforementioned scalability efforts have begun to pay off too. For instance, recently, Ethereum’s average transaction cost has been rivalling Solana with sub 1 gwei in gas charges.
However, despite these efforts, there hasn’t been a notable uptick in demand for L1. Hence, whether the Pectra upgrade will accelerate L1 demand remains to be seen.
Will ETH reclaim $4k?
That being said, in the last 24 hours, calls (bullish bets) eyeing the $3.2k and $3k price targets were the most bought.
For protection, puts (bearish bets) were piled at the $2k target. This suggested that Options traders, in the short term, expected a surge to $3.2k with $2k as support in the wake of extremely bearish moves.
Source: Amberdata
However, the Options market was relatively less optimistic about ETH hitting $4k by the end of April after the Pectra upgrade.
At press time, the traders were only pricing a 14% chance that the king altcoin could reclaim $4,000. The odds of hitting $4k by June jumped to 25%, suggesting that the altcoin had a higher chance of eyeing that level in the summer.
Source: Deribit
Hike in ETH accumulation
Despite ETH’s muted price action, there has been significant accumulation as investors moved ETH off exchanges.
On 5 February alone, 367k ETH were moved from exchanges – A sign of a strong accumulation trend as the altcoin dropped below $3k on the charts.
Source: CryptoQuant
Whether the strong accumulation trend will push ETH’s price higher would depend on improvement in the broader market sentiment.
