Ether (ETH), the second-largest cryptocurrency by market cap, is attempting to sustain its position above the critical $2,600 resistance level following a notable 15.1% surge between Sept. 18 and Sept. 23. This price action comes amid mixed signals in the broader economy, with macroeconomic data indicating a weakening U.S. economy and rising demand for short-term government bonds. Traders now look ahead to the upcoming $2.78 billion Ether options expiry on Sept. 27, a key event that could solidify the recent bullish momentum or pave the way for bears to reclaim control.
Why Ether’s Price Is Improving
The recent upward momentum in Ether’s price is largely attributed to a shift in U.S. monetary policy. The Federal Reserve’s decision to signal a more accommodative stance by cutting interest rates has invigorated markets. The S&P 500 index hit an all-time high on Sept. 24, further boosting confidence in risk-on assets like Ether. Meanwhile, investor concerns about the economy deepened with a significant drop in the S&P Global Manufacturing PMI, increasing interest in alternative assets such as cryptocurrency.
This uncertainty has driven yields on U.S. 2-year Treasury bonds to their lowest level in 24 months as investors seek safety. In this risk-averse climate, cryptocurrencies like Ether are being viewed as scarce assets, benefitting from renewed interest. However, despite this optimism, Ether remains down by 33% over the past four months, with a disappointing U.S. spot ETF launch contributing to $684 million in outflows, according to data from Farside Investors.
$2.77 Billion in Open Ether Options – Bulls vs. Bears
As Ether edges closer to the options expiry on Sept. 27, the $2.77 billion open interest paints a complex picture for traders. Of this total, $1.82 billion are call (buy) options, while $0.95 billion are put (sell) options. Bulls hold the upper hand, with $1.47 billion in call options targeting prices of $2,700 or higher. However, unless Ether climbs above this level by the expiration date, these bullish positions could expire worthless.
The bears, while outnumbered, still have opportunities to shift the balance. If Ether remains below $2,700, especially closer to the $2,600 level, the advantage could swing in their favor.
Also Read: Ethereum Surges 15% As Funding Rates Turn Bullish – Can ETH Break $3,000?
Rising Demand on Ethereum Network and Inflation Concerns
Adding to the bullish case for Ether is the increased demand for Ethereum’s smart contract capabilities. The Ethereum network saw a 15% rise in transactions in the week leading up to Sept. 24, pushing average transaction fees to over $4.50—significantly higher than the $1.45 seen just ten days earlier.
However, not all signs point toward continued upside. A recent spike in Ether issuance has contributed to the cryptocurrency’s struggle to reclaim the $3,000 level. Data from Ultrasound Money reveals that over the past 30 days, 58,856.4 ETH has been added to the circulating supply, representing a 0.6% annualized inflation rate. This, coupled with competition from other blockchain platforms like Solana and BNB Chain, which offer far lower transaction costs, has raised concerns that Ether’s price potential could be capped.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
