Can stable ETFs and company reserves help ETH price surpass $5,000?

The price of Ethereum (ETH) rose to 4,349 USD on Monday, marking the highest level since December 2021. Despite outperforming the overall crypto market with an increase of over 30% in the past 30 days, data from derivative contracts indicate that ETH investors have not yet clearly shifted to a bullish sentiment.

This has raised doubts about the possibility of a bullish rise to 5,000 USD in the short term.

ETH/USD (blue) compared to the crypto market capitalization (red) | Source: TradingViewIn the past month, ETH has recorded a 41% increase, while the total crypto market capitalization has only risen by 9%. With this outperformance, the natural hedging demand has risen as investors take profits and shift their focus to other opportunities. Therefore, the lack of interest in leveraged bullish bets above $4,000 is not surprising.

Annual premium for six-month futures contracts of ETH | Source: laevitas.chIn neutral market conditions, monthly futures contracts typically trade at a premium of 5% to 10% over the spot market to compensate for the extended settlement time. However, although ETH is nearing a six-month high, this premium still remains below a clearly bullish threshold.

Market Sentiment and ETH Options

The lack of optimism in the crypto market is noteworthy, especially as the Ethereum spot ETF attracted $683 million in net inflows from Thursday to Friday. The ETH options market provides important clues to assess whether investors are missing out on the bullish run and are waiting for a better entry point, or if they expect prices to drop below $4,000.

In bearish setups, the delta skew of options often exceeds the neutral level of 6% when put contracts ( sell ) require a higher premium. Conversely, excessive optimism will cause this index to drop below -6%.

The delta skew of 30-day ETH options (put options-call options) | Source: laevitas.chCurrently, the delta skew of ETH options is at -3%, indicating a neutral sentiment. This index has improved significantly since August 2, when it temporarily shifted to a bearish trend after a 13% drop.

In summary, professional investors do not appear overly optimistic but do not expect ETH to test the $4,000 level again. Strong demand from institutions for holding ETH may explain this shift in sentiment.

Activities of Investment Companies

The publicly listed company BitMine Immersion (BMNR) announced on Monday that they have added 317,126 ETH to the company's reserves, worth 1.35 billion USD at the current price. Meanwhile, Sharplink Gaming (SBET) also revealed that they raised nearly 900 million USD to expand their ETH reserve strategy.

Currently, this company holds approximately 600,000 ETH on its balance sheet, worth more than 2.55 billion USD at the current price.

Economic Risks and Future Prospects

The neutral derivative indicators of ETH show a positive outlook, especially as investors are unable to predict the rapid bullish surge from 3,400 USD to 4,300 USD in just eight days. The longer ETH price maintains above 4,000 USD, the more confidence investors will gain and expand their bullish positions, which could pave the way for a bullish run towards 5,000 USD.

However, macroeconomic conditions and overall risk appetite remain the main obstacles to rising profits. Some investors are concerned that U.S. import taxes may affect global economic growth. However, the planned summit between Russian President Vladimir Putin and U.S. President Donald Trump has eased geopolitical tensions, at least for the time being.

If the spot ETF capital continues to increase and companies continue to raise funds to expand reserves, ETH is likely to outperform the overall crypto market.

Mr. Giáo