While Ethereum (ETH) could not experience the expected recovery, the rise experienced yesterday excited investors. However, this rise was short-lived and raised questions about the future of ETH.
At this point, Singapore-based cryptocurrency platform QCP Capital listed its expectations regarding ETH.
Analysts, who made their latest analysis based on the upgrades on Ethereum, stated that investors are preparing for the Pectra upgrade, which is currently in the testing phase and is expected to go live in early April.
Accordingly, analysts stated that volatility increased in ETH before the Pectra upgrade, and that a significant break occurred in Ethereum’s option structure around the end of March due to the Pectra upgrade at the beginning of April.
At this point, referring to previous upgrades, QCP analysts said that ETH increased by 100% before the Merge in 2022, and experienced a 30% increase after the Shanghai upgrade in 2023.
Analysts stated that the narrative for the Pectra upgrade has also started to rise, and that option investors prefer call options with a March 28 expiration date and expect an increase with Pectra.
Although bullish expectations have increased ahead of the Pectra upgrade, analysts noted that general weakness in altcoins and the rise in Bitcoin dominance could weigh on the bullish momentum in Ethereum.
Analysts added that factors such as the collapse of LIBRA and the decline of Solana and ETH to pre-US election levels point to weakness in altcoins.
“In options, the expiration structure develops a noticeable inflection around the end of March, particularly in ETH, likely reflecting positioning prior to Ethereum’s Pectra upgrade.
Looking at past upgrades, The Merge (September 2022) followed a classic ‘buy the rumor, sell the news’ pattern. ETH rose over 100% prior to the Merge.
In contrast, Shanghai (April 2023) was greeted with pessimism as markets feared oversupply.
However, when selling pressure failed to materialize, ETH rose by 30% in the following months.
At this point, investors may be preparing for another wave of volatility with Pectra approaching and implied volatility trending higher after March 28. Vols are intensifying in favor of calls from March 28 onwards.”
*This is not investment advice.
