Ethereum Price Might Reach $3K

By July 31, 2021DeFi
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The price of Ethereum rallied to a range of 35% over the last few days and has since then reclaimed its support level of $2,300. Unfortunately, the crucial local top of $2,450 hasn’t yet been tested since the 17th of June. Part of this recent recovery can definitely be attributed to the hard fork of London- which would go live on the 4th of August.

Quite a few investors and traders have already viewed the launch of EIP-1559 as a bullish factor for the price of the cryptocurrency simply because it would reduce the fees of gas. On the other hand, most of the miners of the cryptocurrency aren’t exactly happy since the proof-of-work model wouldn’t be necessary any further after this goes live.

Ethereum’s Bullish Sentiment Is Missing Even After Futures Contracts Entered The Contango

The launch of Ethereum 2.0 will see to it that the network fees are automatically set. Nonetheless, this would allow most users to choose to pay extra for much faster confirmation. Most miners will be receiving this extra fee, but the base fee will be removed- to put it succinctly, Ethereum will become completely deflationary.

Now, while it is quite difficult to identify the main players behind the recent rally, it could be possible to gauge the sentiment of professional traders’ by analyzing the metrics of the derivatives that have been placed. If the recent move in price was enough to instill far larger confidence, the options skew as well as the futures contracts premium would definitely reflect this change.

One could definitely analyze the difference in price between regular market sports and futures contracts- which would allow one to better understand the sentiment that is rife among most professional traders.

The futures of 3 months should be trading with an annualized premium of 6% to 14% on neutral to bullish markets- which would find them in a perfect line with the lending rate of the stablecoins. Now, by postponing the settlement, most of the sellers would be demanding a higher price for Ethereum, which causes the premium.

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