Ethereum's Network Growth and Derivatives Market Signal Positive Price Outlook

Ethereum (ETH) has been quietly making significant progress amidst the attention-grabbing performances of Solana, XRP, and Cardano in the altcoin market rally. With a 2% increase in the last 24 hours, the ETH price has reached $1839, accompanied by a market cap of $221 billion.

Ethereum Network Growth Jumps

According to on-chain data from Santiment, Ethereum's recent surge above the $1,800 mark is supported by a notable rise in the creation of new addresses. In fact, it has reached the highest daily number since October 7th. This long-term trend of network expansion, coupled with a decrease in available supply on exchanges, could potentially propel Ethereum's price ($ETH) to surpass the $2,000 threshold once again.

A Look Into ETH Derivatives Market

The movement of ETH by Vitalik Buterin to Coinbase has sparked discussions around the ETH price rally. Furthermore, Ethereum derivatives data indicates a growing bullish sentiment despite recent selling pressure.

ETH has experienced a 14.7% decline in price, dropping from its peak at $2,120 on April 16, 2023. However, two key derivatives metrics suggest a significant increase in investor bullishness, reaching levels not seen in over a year.

Firstly, the Ether futures premium, which measures the variation between two-month futures contracts and the spot price, has surged to its highest point in over a year. In a robust market, the annualized premium, also known as the basis rate, generally falls within the range of 5% to 10%. This surge in the metric follows a 15.7% price rally for ETH over a two-week period.

Additionally, analysis of the options market provides further insights. The 25% delta skew in Ether options serves as an indicator of when arbitrage desks and market makers might overcharge for upside or downside protection. Notably, the Ether options 25% delta skew reached a negative 16% level on October 27, marking the lowest point in over 12 months. During this period, protective put (sell) options were trading at a discount, reflecting excessive optimism among traders.

In conclusion, Ethereum's recent progress in network growth and the derivatives market suggests a positive outlook for its price. With the potential to surpass the $2,000 threshold once again, investors and traders should closely monitor Ethereum's performance and take advantage of the opportunities it presents.