A look into the Ethereum derivatives market indicates that the "merge"— a long-awaited upgrade to the Ethereum network—is setting the stage for crypto traders to "buy the rumor, and sell the news."
That’s according to the blockchain intelligence firm Glassnode, which today reported "backwardation" across both ETH options and futures heading into September, when the merge is expected to occur. The term backwardation refers to when prices for an asset in the futures market are lower than its underlying spot price.
“If we look at the September contracts on [crypto derivatives exchange] Deribit, the directional bias of Ethereum traders is immediately clear,” reads the report. “Call options dwarf put options for size, with traders betting on ETH prices upwards of $2.2k, with significant open interest even out to $5.0k.”
A call option is a temporary guarantee that a trader can buy a given asset at a predetermined price, if the trader chooses. A put option is the same, but for selling an...
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