ETH might have rallied 35% off its $1,750 low but derivatives data shows pro traders are not so bullish.
Ether (ETH) rallied 35% over the past ten days and reclaimed the critical $2,300 support, but the crucial $2,450 local top hasn't been tested since June 17. Part of the recent recovery can be attributed to the London hard fork, which is expected to go live on Aug. 4.
Traders and investors view the EIP-1559 launch as a bullish factor for Ether price because it is expected to reduce gas fees. However, Ether miners are not thrilled with the proposal because the proof-of-work model will no longer be necessary after ETH2.0 goes live.
The network fees will automatically be set, although users can choose to pay extra for faster confirmation. Miners (or validators in the future) will receive this additional fee, but the base fee will be burned. In a nutshell, Ether is expected to become deflationary.
While it's difficult to identify the main drivers of the recent rally, it is possible to gauge professional traders' sentiment by analyzing derivatives metrics.
If the recent price move was enough to instill confidence, the futures contracts premium and options skew should clearly reflect this change.