Despite strong negative market sentiment, some investors continue to rely on the derivatives market. According to the latest expert charts, the number of contracts for the purchase of Ethereum options on exchanges has been growing. Although there are currently both rates for prices below $ 1,000, and rates aimed at $ 3,800 and above.
Thus, after considering Ether options, one might think that traders have either become overly optimistic or ultra bearish. Note, however, that the bulls spent more money to create their positions.
After the recent downturn in the market, few think that ETH will start a bullish correction within a couple of weeks.
While open interest in ETH options wasn’t hit hard during the market crash, it’s hard to imagine Ethereum hitting new highs in such a short period.
On the other hand, the activity on the derivatives exchange suggests that despite the bearish pullback, investors have relied on trading ETH options for profit.
DeFi growth supports higher Ethereum prices
The market for Ethereum-based decentralized financial services DeFi is expanding rapidly. The Ethereum ecosystem continues to dominate the cryptosphere in terms of the number of decentralized applications (DApps) deployed.
The expansion of the DeFi market began back in 2019. Its development contributes to the more active use of ETH coins.
A key benefit of DeFi-based services is their freedom from government and corporate influence.
That is why analysts are confident that the popularity of such applications will continue to grow in 2021. According to their forecasts, such a positive trend will contribute to a more active use of ether in various transactions. And, accordingly, will lead to an increase in its value.
At the moment, DeFi protocols support a Total Value Locked (TVL) of $ 48 billion.
The long-awaited move to a proof-of-stake consensus model may be at the root of positive expectations
The popular cryptocurrency Ethereum will switch to the Proof of Stake (PoS) model over the “coming months”. Which is planned to reduce the network’s energy consumption by an impressive 99.95%. But most importantly, this transition promises positive changes for gamers. Since the use of video cards for mining cryptocurrency will become meaningless.
According to experts, Ethereum continues to strengthen its position thanks to its unique development ecosystem, on the basis of which decentralized applications can be created. This innovative approach of the creators of Ethereum already proven its effectiveness in practice and unequivocally confirmed by the attention from such giants of the development industry as Microsoft. This ecosystem, a blockchain-based software platform, is the main difference between Ethereum and other cryptocurrencies.
Recall that Ethereum has a unique model for finding consensus among all cryptocurrencies. It combines two methods, and in a special, original way: the network began functioning from the classic Proof-of-Work, gradually moving to Proof-of-Stake through a series of hard forks.
The network will certainly benefit from the transition, as the huge energy costs of maintaining mining centers will become unnecessary. According to analysts, for the same reason, the ETH rate may once again turn around and go up.