Key Points
- Large investors are betting on Ethereum’s recovery, with price targets of $3K-$4K by the end of the year.
- The Ethereum/Bitcoin ratio indicates Ethereum’s strengthening performance relative to Bitcoin.
Big investors are predicting a robust rebound for Ethereum, with price targets between $3K and $4K. The latest data from Deribit, released on November 7, indicates that Ethereum’s rise was boosted by major funds purchasing substantial call options (bullish bets) with $3K, $3.2K, and $4K price targets for the year’s end.
Deribit noted, “The implied Trump support for Alts+Defi lifted even the long-suffering ETH. Initially, Nov+Dec 2.2-2.4k Puts dumped. Then, as optimism took hold, Dec 3k+3.2k Calls, Dec 3.2-3.6k, and Mar 3k-4k Call spreads were bought. As ETH >2.8k, Mar 2.8-3.8k Call spread traded $125m notional.”
Signs of a Market Shift
The significant offloading of $2.2K-$2.4K puts (bearish bets) signaled a shift in market sentiment. This suggests that large players don’t anticipate Ethereum dropping to $2.4K again.
On the upside, the massive buying of calls indicates that Ethereum could be on the brink of a robust recovery. This follows a period of intense FUD and weak market sentiment.
The enthusiasm surrounding Ethereum was also reflected in the Ethereum/Bitcoin ratio. This ratio tracks Ethereum’s price performance relative to Bitcoin.
Ethereum’s Performance Against Bitcoin
Despite recent attention on Bitcoin, Ethereum made gains this week. The Ethereum/Bitcoin ratio hit a new yearly low on the eve of the US election but has since risen by 7.3%. This suggests that Ethereum is strengthening against Bitcoin.
The short-term recovery of the Ethereum/Bitcoin ratio could depend on the 50-day Moving Average (MA). In the past, a further uptrend was observed when the ratio broke above the 50-day MA.
Meanwhile, demand for Ethereum in the US spot market has returned after being negative since October. According to the Coinbase Premium Index, which measures US investor demand, it turned positive as the Ethereum price hit $2.9K.
US spot Ethereum ETF products also saw $79.7 million inflows on Thursday, a two-month high. Historically, positive Coinbase Premium Index readings have coincided with a strong recovery for Ethereum. Therefore, Ethereum holders could enjoy additional gains if the metric remains positive and the trends repeat.
On the price charts, $3K is the key level to reclaim to demonstrate continued Ethereum strengthening. This level was H1 2024 support, and reclaiming it could set the stage for reaching $3.2K and $3.6K targets.
