Attention ETH traders! Caution may be the word of the day for these reasons

• Bearish sentiment looms as Ethereum’s options market indicates caution.
• Declining whale interest and network activity posed as potential headwinds for ETH.

In a surprising turn of events amidst a generally bullish cryptocurrency market, Ethereum[ETH] encountered bearish pressures.

Realistic or not, here’s ETH’s market cap in BTC’s terms

Data sourced from Greeks.Live revealed that approximately 200,000 ETH options were on the verge of expiring, boasting a Put Call Ratio of 0.87, a telltale sign of bearish sentiment. Additionally, the max pain level was pegged at $1,650, with a notional value totaling $330 million.

Source: Greeks.live

This mounting bearish sentiment became even more apparent when observing the declining Open Interest across all exchanges. This indicated a waning interest in Ethereum options and futures.

Implied Volatility, which serves as a metric for anticipated price fluctuations, also showed a decline. This could imply that the market anticipates ETH’s price to remain relatively stable in the near term, hinting at a lack of substantial buying interest.

Source: Greeks.live

Moreover, Ethereum’s 25 Delta Skew, a metric used to assess sentiment in the options market, also experienced a downturn. This shift indicated a lean toward a more bearish sentiment among options traders. Thus, potentially reflecting a lack of confidence in ETH’s short-term price prospects.

Source: Velo

Interestingly, in contrast to these bearish indicators, there haven’t been substantial liquidations for either long or short positions in the ETH market. This suggested that traders are approaching ETH with caution, refraining from making heavy bets either for or against the cryptocurrency.

Is your portfolio green? Check out the Ethereum Profit Calculator

Whales aren’t too interested

In addition to the options market data, there was evidence pointing to declining whale interest in Ethereum. Glassnode’s data has brought to light that the number of addresses holding 1,000 or more ETH has dwindled to a five-year low, totaling 6,010 addresses.

This suggested that significant holders are either reducing their positions or transferring their ETH elsewhere, which could cast a negative shadow on Ethereum’s price.

? #Ethereum $ETH Number of Addresses Holding 1k+ Coins just reached a 5-year low of 6,010

View metric:https://t.co/iDNXAbbLRt pic.twitter.com/FWsRMgyHFR

— glassnode alerts (@glassnodealerts) October 5, 2023

Furthermore, Ethereum’s network was displaying signs of deceleration. Network growth, which gauges the number of new addresses interacting with ETH, has been on the decline. Additionally, the velocity of ETH transfers receded, hinting at less frequent movement of ETH between addresses. These metrics collectively indicated that fresh interest in Ethereum was on the wane.

Lastly, Ethereum has been carrying a relatively high Market Value to Realized Value (MVRV) ratio. This ratio compares the market price to the realized price of ETH. A high MVRV ratio could suggest impending selling pressure from profit-takers, which may exert downward pressure on ETH’s price.

Source: Santiment