Ethereum (ETH) is inching closer to its all-time high, with a 3.9% gap to bridge as the altcoin market experiences a surge in strength. Data from Glassnode reveals that leverage across major alternative cryptocurrencies has hit a record $47 billion, indicating a bullish sentiment among investors.
Currently trading at $4,738.94, Ethereum has seen a 3.1% increase in the past 24 hours, bringing it within striking distance of its previous peak reached in November 2021. The recent rally is part of a broader trend of altcoin gains, with Ethereum, Dogecoin, XRP, and Solana all posting impressive seven-day returns.
Bitfinex’s head of derivatives, Jag Kooner, attributes Ethereum’s momentum to factors such as strong ETF inflows, institutional accumulation, and a favorable macroeconomic environment following softer CPI data. This combination has led to renewed interest from traders in risk assets, with both Bitcoin and Ethereum seeing increased long positions.
Options activity surrounding Ethereum has surged, with open interest reaching a year-to-date high of approximately $16.1 billion. This spike in open interest suggests a growing demand for options contracts as traders anticipate a potential breakout above previous highs. Call premium activity has been particularly bullish, with traders paying significant premiums in anticipation of further price appreciation.
Despite the buildup in options open interest, implied volatility remains low, indicating that the market is expecting a significant move in the near future while hedging against downside risks. Kooner notes that the compressed volatility levels could lead to sharp price swings in response to any unforeseen macroeconomic events.
The broader altcoin sector has also shown significant outperformance, with market-cap-weighted seven-day returns surpassing statistical benchmarks multiple times since April. This trend underscores a sustained rotation of capital from Bitcoin into altcoins, creating conditions where price movements in one asset can trigger cascading effects across the entire market.
In conclusion, Ethereum’s recent price surge, coupled with strong options activity and altcoin outperformance, point to a market environment characterized by heightened speculation and a growing appetite for higher-risk assets. As investors brace for potential price swings, the cryptocurrency market continues to evolve and offer opportunities for both traders and long-term investors.