Historically, ether’s average returns have been lower than bitcoin’s in October. Analysts at QCP Capital have observed optimistic signs indicating that derivatives traders believe ether may outshine its underperformance trend.
October Performance Analysis
October has historically benefitted bitcoin, averaging a 22.9% gain in eight of the last nine years. Ether, on the other hand, has an average October return of about 5%. Despite expectations of ether lagging behind bitcoin again this month, optimism exists for ether’s near-term performance.
Analysts from QCP Capital reported significant buying of ether October call options, indicating bullish sentiment among traders expecting prices to rise. Currently, there are over 63,600 ether call option contracts set to expire on October 11, with a notional value of $167 million. An additional 26,200 contracts are set to expire on October 18, valued at $69 million, based on Deribit data.
Call options for ether with a $2,800 strike price have seen the most trading volume in the past 24 hours. The notable scarcity of put options suggests traders are betting on ether exceeding the $2,800 mark by the expiration date.
Historical Trends in Ethereum’s Fourth Quarter
Analysts from Bitfinex note that while ether generally achieves solid returns in Q4, performance across the altcoin sector is more variable. Historically, the first quarter has delivered the strongest results for ether and altcoins, with the second quarter also showing promise. However, they caution that historical data on ether and altcoins is limited compared to bitcoin due to ether’s trading launch in Q2 2016 and the recent emergence of many altcoins.
Positive Signals in the Ether Futures Market
The futures market also shows sustained optimism for ether. Coinglass data indicates that ether’s open interest-weighted funding rate has been positively trending since the major risk asset sell-off triggered by Japan’s surprise interest rate increase in late July. This sell-off sparked a substantial unwind of the yen-carry trade, leading to a global stock market downturn on August 5—marking Japan’s worst stock performance in 37 years.
Since mid-September, ether’s open interest-weighted funding rate has remained positive. The last instance of this rate entering negative territory was prior to September 18, just before the Federal Reserve’s dovish pivot. As of 07:49 a.m. ET, the price of ether has increased by over 1.4%, trading at $2,638, with bitcoin dominance at 53.4% and ether dominance at 13.4%, per CoinGecko data.
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