Ether options market shows bullish trends amid caution

The Ether (CRYPTO:ETH) options market is showing a bullish sentiment, with traders anticipating medium-term growth despite the possibility of downside volatility.

As of February 16, CoinGlass data reveals that over 70% of options open interest is in call contracts, signaling that traders are increasingly betting on Ether's price rising.

This bullish positioning indicates cautious optimism, with the majority of activity focused on call options with strike prices between $3,000 and $4,000, according to Nicolai Sondergaard, a research analyst at Nansen.

"The ETH options market is leaning bullish, but there’s a touch of caution," Sondergaard stated.

The low put/call ratio further supports this optimistic outlook, with traders looking at February and March expirations, indicating confidence in medium-term growth.

However, large investors are hedging their positions with put options, which make up 22% of block trades, showing they are aware of potential downside risks.

Sondergaard pointed out that implied volatility is skewed toward higher strikes, suggesting a bullish outlook, but stable historical volatility helps to keep the market grounded.

Although Ether has traded nearly flat over the past week, it has seen a decline of over 21% on the monthly chart.

ETH must hold above the $2,600 support level to avoid further downside liquidity.

A correction below this level could lead to over $500 million in leveraged short liquidations across exchanges.

This support level is crucial to preventing larger sell-offs and further liquidation.

Additionally, external factors like geopolitical trade tensions could put pressure on both Bitcoin (CRYPTO:BTC) and Ether prices.

At the time of reporting, the Ethereum (ETH) price was $2,671.14.