• Ethereum breaches past $420 after a solid 7% increase Sunday
  • Options data reveals bullish sentiments prevail for the second largest cryptocurrency
  • Ethereum's price appreciation is dwarfed by the value increase of governance tokens like YFI

Ethereum breached past $420 after a solid value appreciation Sunday. While decentralized finance (DeFi) and Ethereum’s transition to proof-of-stake is creating excitement for the world’s second largest cryptocurrency by market cap, analysts are expecting further upside based on data from the options market.

Interest for ETH options increased to $393 in the last three months, Cointelegraph reported. While this does not reflect bullish or bearish sentiments, data from suggest there are 535,000 ETH options that open interest at $380 and below while there are only 243,000 ETH options at $425 and higher. The publication suggests traders and investors were probably taken by surprise with ETH’s recent price increase. Ethereum hit its 2020 high of $438 on Aug. 14.

Using the 25% delta skew indicator, Cointelegraph noted that the sentiment turned bullish by late May, reaching 20% optimist level by late July. Currently, the -12% skew still lies in bullish territory.

With the key resistance of $406 breached, bulls are aiming to test the $445 level, news outlet NewsBTC reported. The short-term resistance rests at $430 while $420 is still the key support. A breakdown below $420 would pivot ETH back to $400 and a breach above $430 means bulls are ready to take on $445 or $450.

With Ethereum being the main method of buying DeFi tokens on UniSwap Exchange, the DeFi hype has contributed positively to its price, although its price increase is dwarfed by the current price growth of governance tokens such as YFI, YFFI, and YF Link. In the last seven days, Ethereum’s value increased by 7.9%, while YFI increased by 147%. YF Link also had a 248% increase. Most notably, YFI priced has increased more than the current price of Bitcoin ($11,600) at $30,770 as of this writing.

Not everyone is optimistic about the future price of Ethereum, with Cane Island Alternative Advisors’ Timothy Peterson seeing a price decline in the next 12 months. "Pessimistic about Ethereum price for the foreseeable future. Long-term growth rate only supports average annual price appreciation of 30% per year. ETH could lose 50% in the next 12 months," he said in a tweet.

With the meteoric rise of cryptocurrency in the last two years, new investors are looking to see massive returns. Pixabay