Ether Has 1 in 5 Chance of Tapping $5K by End-June, DeFi Options Protocol Lyra Says

There is a 20% chance of ether rallying as high as $5,000 by the end of June, according to dominant DeFi options protocol Lyra.
Traders have snapped up ether calls at the $5,000 strike and higher this week.

As a researcher with experience in the cryptocurrency market and options trading, I find the recent data from Lyra’s decentralized options marketplace intriguing. The 20% chance of ether (ETH) reaching $5,000 by the end of June is an optimistic prediction that has caught the attention of traders. Ether’s current price sits around $3,740, meaning a rise of about a third would be required to hit this new record.As an analyst, I’ve examined the data from the decentralized options marketplace Lyra, and I can tell you that there’s a 20% probability that the price of ether (ETH) could reach $5,000 by the end of next month based on current market trends. This is an impressive potential increase, considering that the highest recorded price during the last bull run was only $4,692, according to CoinDesk archives.

To surpass the current record, Ethereum would need to experience a roughly 33% increase from its present price around $3,740. This growth is likely due to the recent surge of over 20%, fueled by heightened optimism that the U.S. Securities and Exchange Commission (SEC) will grant approval for spot Ethereum exchange-traded funds (ETFs).

According to Nick Forster, founder of Lyra and a former Wall Street options trader, the markets for Lyra’s ETH options suggest that there is approximately a 20% likelihood that ETH will surpass $5,000 by June 28. Moreover, traders have boosted their positions, raising the probability to around 20%, that ETH will go beyond $5,500 before July 26 due to the Ethereum ETF anticipation.

I’m here to share some insights about Lyra, a decentralized trading protocol that supports spot, perpetuals, and options markets. In the last 24 hours, Lyra recorded impressive crypto options trading volume of $1.33 million, representing more than half of the total $2.08 million decentralized finance (DeFi) options trading activity worldwide, according to reliable data source DeFiLlama. Traders using Lyra were among those who accurately anticipated Bitcoin‘s first-quarter rally and the April peak at approximately $70,000.

As an analyst, I would describe derivative contracts, specifically options, as follows: I represent a financial tool that grants its owner the ability to enter into a future transaction for an underlying asset at a predetermined price, which is agreed upon today. With a call option, you’re given the right to purchase the asset, making it an attractive choice when expecting or wanting to profit from potential price increases or hedge against rallies. Conversely, a put option provides the holder with the opportunity to sell the underlying asset, making it a popular choice among traders anticipating a decline in prices or seeking to protect themselves against potential drops.

This week, traders using the Lyra platform have bought ethereum call options with expiration dates in June and July at prices above $5,000. Their actions indicate a optimistic perspective on ethereum’s future price movement.

“According to Forster, the approval of an ETF based on Ethereum is expected to have a greater impact on Ethereum than on Bitcoin. Ethereum currently has a market capitalization that is around one-third of what Bitcoin’s was before its ETF was listed. This situation could lead to increased trading volumes in Ethereum options as investors prepare for the ETF approval and anticipate market volatility without facing liquidation risks.”

The tendency towards calls on Lyra aligns with the trading patterns observed on major decentralized exchanges, such as Deribit.

2024-05-22 14:15

Ether Has 1 in 5 Chance of Tapping $5K by End-June, DeFi Options Protocol Lyra Says

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