According to the news of The Block on July 31, interest in Ether (ETH) derivatives is increasing as the date of Merge, the major structural update of Ethereum, the second largest coin in the crypto money market, approaches.
It is stated that the total open interest (total volume of open positions) of options on Ether increased by $2.92 billion in 1 month from $2.87 billion to $5.85 billion between July 1 and August 31. On the forward side, it is stated that the total open interest increased by $2.27 billion in a month, rising from $4.58 billion to $6.85 billion between July 1 and August 31.
It is said that the dates of 27-30 July were quite interesting for Ether derivatives, as the total open interest on both the options and forwards side exceeded 7 billion dollars and approached April 2022 levels between these dates.
(Total Open Interest of Ether Options)
(Total Open Interest of Ether Futures)
In an interview, Genesis Global Trading Head of Derivatives Joshua Lim explained that the increase in transactions in derivatives was due to macro hedge funds that took positions before the Merge update. Lim stated that low premiums in Ether options are attractive to hedge funds, and that the rising volumes could be a combination of a call butterfly (a cost reduction strategy by simultaneously buying and selling options with different strike prices) pricing the expected $3000 levels in Ether.
According to the data in the news, it seems that the positive correlation between Bitcoin's spot-to-futures volumes and Ether's spot-to-futures volumes has been destroyed. According to experts, the collapse of the correlation between these two assets, which have been positively correlated for a long time, may herald a breakout, but the more remarkable point: Ether decreases as spot-to-futures transitions increase in Bitcoin, which may be an indicator of increasing shorts in Bitcoin.
(Bitcoin spot-to-futures volume)
(Ether spot-to-futures volume)