Ethereum Flippening of Bitcoin? Its Happening in the Options Market First

In the options market, Ether (ETH), the native token of Ethereum’s network, has eclipsed industry leader Bitcoin (BTC). Ethereum flippening of Bitcoin remains highlighted as the Ethereum rise has overtaken Bitcoin in the options market while investors await a merger. The phrase “Flippening” pertains to the fictional scenario in which Ethereum (ETH) overtakes Bitcoin (BTC) as the largest cryptocurrency, and they both share the same market capitalization of 100%.

Ethereum Flippening of Bitcoin?

Deribit is the world’s largest crypto-options exchange, accounting for more than 90% of total trading volume and open interest worldwide. At the moment, the total cash value of open ether options contracts on major exchange Deribit was $5.7 billion, or 32% more than the $4.3 billion locked-in open bitcoin options deals.

Open options transactions or open interest are the numbers of options contracts (call and put) traded but not squared off with an offsetting position. The notional open interest is calculated by multiplying the number of contracts open by the current spot market price of the underlying asset.

Ether spot market activity has also increased, with the cryptocurrency recently overtaking Bitcoin being the most traded coin on the Nasdaq-listed crypto exchange Coinbase. While Ether’s trading volume accounted for 33% of overall turnover in the week ending July 29, Bitcoin’s (BTC) trading volume accounted for 32%, with Solana (SOL) coming in third.

Ethereum Price Review  

On August 2, ETH began the day at $1,631.57, with a high of $1,654.93 and a low of $1,569.54. Currently, ETH is trading at $1,674.22 while gaining nearly 0.59% today and 20.68% in the last seven days. Bitcoin, the world’s largest cryptocurrency, has long held the top spot in the digital asset market. However, due to Ether’s spectacular rise, supporters of the second-largest cryptocurrency by market capitalization are renewing their predictions that it will eventually take the crown.

The current market capitalizations of ETC and BTC are $191 billion and $434 billion, respectively. It stated that ETC’s market cap is 44.05% of BTC’s market cap. The cryptocurrency market has recently been driven by the hype surrounding the impending Ethereum “merge,” a technological advancement to increase the efficiency of the blockchain.

Ethereum Merge Under the Spotlight

The Merge is expected to occur in September and would combine Ethereum’s existing proof-of-work blockchain with the Beacon Chain, a proof-of-stake blockchain that has been operational since 2020. As traders pour into ETH with hopeful bets that Ethereum’s upcoming merger will result in a 90% reduction in ETH issuance and give the crypto store of value appeal, Ether has taken the unique first lead over bitcoin in the options market.

The merger’s final major trial test is scheduled for August 6-12. If everything goes as planned, the actual Merge could take place the week of September 19, according to well-known Ethereum developer Tim Beiko. Until then, there may be more price volatility and additional effects on derivatives.

Ethereum Enters the Options Market

The options market is a public exchange where traders can trade options. Furthermore, the number of active derivative contracts is represented by the number of open interest options that have not been closed out or expired. Put options protect investors from price declines, while call options protect against price increases.

The sliding put-call open interest ratio, which measures the proportion of open put positions to open call positions, indicates that demand for calls is increasing. Furthermore, in terms of daily trading activity in the futures and options markets, Ether is still trailing bitcoin. The theoretical open interest in ETH futures was around $6 billion, less than half of the $12 billion in bitcoin futures.

The options markets predict that ETH 2.0 will be a superior product, making it a high-risk, high-reward play at this time. However, the Ether options market flip and the associated buzz could be nothing more than hype. If this trend continues, the “Flippening” may become more likely than previously thought.

Ethereum Price Chart- Source: Tradingview

Ethereum Daily Technical Levels

Support Resistance

1647.13 1733.20

1614.20 1786.34

1561.06 1819.27

Pivot Point: 1700.27

Ethereum (ETH/USDT) Technical Outlook

Recalling my previous update on Ethereum price prediction, the ETH/USDT pair has made a comeback after completing a 50% Fibonacci retracement at $1,552. ETH is attempting to reclaim the $1,758 triple top level, which has now become a major resistance level. However, BTC may face immediate resistance near $1,695 on its way to $1,758. Whereas the support level remains at $1,615 per unit. If the BTC/USDT pair breaks below this level, it will be exposed to the 61.8% Fibonacci retracement level of $1,505.

Furthermore, leading technical indicators such as RSI and MACD support a buying trend. As can be seen, the MACD produces smaller histograms than the previous one. Similarly, the RSI is showing a bullish crossover above the 50-point midpoint. Both indicate a bullish market bias. As a result, keep an eye on $1,600 to remain bullish above this level. Good luck!

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