The Rollercoaster Ride of Ether: Is $1,900 Just a Stop on the Way to the Moon?

Astonishing Gains: A Brief Recap

Ether has been on a spectacular journey, boasting an astonishing 85% increase in the last 30 days. If you thought seeing Ether at the $800 range was a wild memory, fasten your seat belts—it’s been a tumultuous ride since then!

Why the Bull Run? Blame the Merge!

While Bitcoin experienced a healthy 28% uptick, it was the anticipation surrounding the Merge that really pumped Ether prices. What’s the Merge, you ask? It’s the highly awaited transition to a proof-of-stake (PoS) network, set to revolutionize Ethereum’s scalability and cut down those pesky transaction fees. Think of it as upgrading your old flip phone to the latest smartphone—sure, you still have a phone, but now you actually enjoy using it!

Derivatives Data: The Party Pooper

But hold your horses! While bulls are dreaming of a $1,900 support level, the derivatives market paints a much gloomier picture. Ether’s futures premium has been stuck in the negative since August 1. In layman terms? Professional traders are skittish. This phenomenon, known as “backwardation,” is the financial equivalent of everyone at a party deciding they’d rather go home than dance to the DJ’s latest tracks.

Options are Optional, but Not Thrilling

To get a grip on trader sentiment, we turn to Ether’s options market. The 25% delta skew can tell us whether traders are overcharging for protection against a price drop. Here’s the funny part: the skew hit -4% on July 18, indicating traders were particularly unwilling to take risks. Even after an 85% rally, the vibes are less “party” and more “let’s just play it safe.”

What Lies Ahead? Brace for Volatility

As we approach the Merge, expectations are running high—but not necessarily in a good way. Many professionals foresee volatility akin to a rollercoaster with a broken safety harness. Analyst Mohit Sorout even predicts chaotic swings around the Merge date, potentially resulting in unwinding of futures that could suck Ether’s recent gains into a black hole.

“Strap in for the most notorious crypto play this year.” — Mohit Sorout

Investors eagerly await potential “free” coins from an expected proof-of-work fork, but there’s a nagging question looming: will Ether relinquish its magnificent 85% gains in the process?