Ethereum Transaction Fees Unexpectedly Declined by 80%
Recently, Ethereum (ETH) miners were facing a drop in revenue. According to data from Santiment Research, ETH transaction fees plunged to nearly 80% from its all-time high. Thus, this opened a chance for cheaper on-chain operations.
They define Ethereum transaction fees as ‘Gas’ and they use it for paying for ET operations on its blockchain network. Aside from normal transactions, these are also interactions with the decentralized application and smart contracts. Fees dropping indicates that using Ethereum projects are becoming less expensive.
ETH miners have been cashing in with average results because the fees on its blockchain network have boosted. This was partly due to the emerging interest in DeFi assets. Currently, it has approximately $5 billion worth of digital assets when it comes to value, higher than the recorded $1 million earlier this year.
Furthermore, Ethereum is a cryptocurrency made for decentralized applications and the deployment of smart contracts. They designed and ran these without any fraud, interruption, control, or interference from a third party.
Also, Ethereum is a decentralized system, fully independent, and no one authorizes it. As it has no pivotal point, they connected the platform to thousands of its users through their computing systems worldwide. With that, it is nearly impossible for the crypto to go offline.
Before $112 Million Expiry
During the last three months, Ether options contract open interest has increased five-fold to sit at $452 million currently.
The $112 million will expire this Friday, and it may have a considerable market impact. But still, this will depend on the balance between the bullish and bearish strategies.
Although its open interest might look modest compared to Bitcoin’s (BTC) $1.9 billion options market, ETH options have become more relevant during the last two months.
Not all options market strategy is bullish or bearish. The covered call involves buying the underlying asset while selling a call (buy) option.
They aim to profit from a fixed income strategy whenever there is a decent enough premium. All in all, this is a neutral-to-positive strategy. With that, investors will profit as long as Ether stays above a specific threshold.
While open interest for options may still dip below a $320 strike, it could have been taken place over a month ago while ETH traded below $250.
These kinds of in-the-money options indicate that strikes are 15% or more below the current ETH price. Also, they typically use this for the above-mentioned covered calls strategy.
As of now, there are 97k Ether options with a $400 strike – although this includes all calendar expiries until March 2021. A trader can have a better gauge of investor’s exact sentiment by analyzing the arriving August 28 expiry exclusively.
Friday’s Expiry
Meanwhile, Debirit exchange currently has more than 90% market share. Thus, its Ether markets will be carefully analyzed.
Initially, one should note the balance between call (buy) options and put (sell) options. While Ether price currently hangs around $390, one must focus on the nearest strike levels.
Recently, there were 27.8k call options stacked against 31.4k put options at the $380 to $400 range. That means that, at least for the August expiry, there might be an even force between bullish and bearish options strategies.
