Ethereum shillers call for $5K ETH, and this time derivatives data is backing them up

The Ether (ETH), pundits claim that the price of $5,000 has been “programmed” since 2018. Some even go so far as to call for $20,000 in the long-term.

5000 $ETH It is programmed.
— Koroush AK (@KoroushAK) October 29, 2021

These bullish calls include ETH 2.0 staking as well as the lower inflation resulting in EIP-1559.

In 2017, $BTC was at $2k. 7 months later, it was nearly $20k. What will happen when the world realizes the deflationary and APR aspects of $ETH? This is happening in less than two months. Your largest position should be $20,000
— Don’t Follow Shardi B If You Hate Money $ (@ShardiB2) May 16, 2021

The estimate of $20,000 is equivalent to $2.36 trillion in market capitalization. Even if it’s possible, it seems unrealistic for the moment.

Ether entered an ascending channel in Sep. 20, which suggests that $5,000 will become a support level by November.

Kraken: Ether price in USD Source: TradingView

The net value locked growth (or adjusted TVL) on Ethereum network smart contract smart contracts is a strong support for the current strength. TVL is a measure of assets that have been deposited through decentralized applications. It is typically led by DEX exchanges and lending protocols.

Total value locked in USD for Ethereum network (TVL) adjusted. Source:

Ether’s TVL surpassed the $71 billion record on Oct. 16 and saw a 50% increase in three months to Oct. 31.

Investors could be driven away by negative regulatory winds from the United States. Many states in the United States, including Kentucky and Texas, Alabama, Vermont and New Jersey, have cracked down on crypto lending.

The United States Commodity Futures Trading Commission investigated Polymarket, a New York-based decentralized prediction marketplace. Bloomberg reported that the agency was evaluating whether its decentralized finance (DeFi), application allows customers to trade binary options or swaps without the need for regulator approval.

Some investors, on the other hand expect positive movements from traditional markets to boost the rally. The best-performing month for the S&P 500 has been November since 1985, according to data.

Pro traders predict that ETH prices will rise

Investors should be able to monitor the monthly contract premium (also known as “basis”) to confirm their faith in the $5,000 prophecy. These fixed-calendar options do not have a funding fee, which is why their prices will be different from regular spot trades.

A trader can determine the bullishness of the market by measuring the gap in expense between futures contracts and regular spot markets. The three-month futures contract with a base of 15% or more will trade when there is excessive buyer optimism.

Ether 3-month basis rate for futures. Source:

Not even the 9.5% correction in ETH price from $4,300 – $3,900 on Oct. 27, was enough to shake those traders’ spirits. The basis rate currently stands at 17% which indicates moderate bullishness.

Option markets are moderately bullish

Ether hit an all-time high of $4,460 on October 29. To determine how optimistic traders really are, we need to consider the 25% delta skew. This indicator allows you to compare similar call (buy) or put (sell), options.

When the premium for neutral-to-bearish options is greater than similar-risk options, the metric will be positive. This is a common “fear” scenario. A negative skew, on the other hand, means that upside protection is more expensive and points towards bullishness.

Deribit Ether 60 day options 25% delta skew Source:

The chart above shows that the indicator is at negative 9 flirting with “greed” momentum. This optimistic stance began on Oct. 18, but Ether didn’t have a good day because it tested the $3700 support multiple times.

Both indicators are located at the edge of a neutral to bullish zone. This should be taken as a positive sign that allows buyers to leverage derivatives instruments.

Futures and options metrics indicate that perma-bulls asking for $5,000 in the near term are most likely correct.

Risk is inherent in every investment or trading move. Before making any investment or trading move, you should do your research.

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