Analysts have noted that call options are dominating ether's open interest as investors anticipate a potential rise in institutional demand from spot exchange-traded funds (ETFs).

Last Thursday, the U.S. Securities and Exchange Commission approved ether spot ETFs. However, unlike bitcoin ETFs, which began trading immediately after approval, ether ETFs might not launch for several weeks or months.

Following these approvals, QCP Capital analysts highlighted a positive structural outlook for ether, observing that the largest increases in ether options open interest over the past 24 hours were in call options.

Data from the Deribit derivatives exchange supports this, showing the ether put-call ratio for all expirations at 0.56, indicating a higher volume of call options, which signals bullish market sentiment.

The analysts also noted that the implied volatility (IV) for near-term ether call options is higher than for put options, suggesting the market expects upward price movement or greater demand for call options.

QCP Capital analysts added that ether's short-term volatility could remain 15-20 points above bitcoin's, with a skew favoring calls. However, they mentioned that a potential breakout in ether's price might require more clarity on S-1 approvals.

According to The Block's Data Dashboard, ether's IV spiked last week following the SEC's approval of eight spot ether ETFs. Although IV has slightly decreased since then, it remains higher than that of bitcoin.

Implied volatility is a measure used to gauge the market's expectation of price movements. Higher IV indicates anticipated significant price movements, while lower IV suggests stability.

Options are financial derivatives that give the holder the right, but not the obligation, to buy or sell an asset at a predetermined price before a specified date.

Ether's price saw a modest increase of 0.5% in the past 24 hours, trading at $3,922 as of 6:24 a.m. ET, according to The Block’s Price Page. The GM 30 Index, which tracks the top 30 cryptocurrencies, rose by 0.43% to 146.98 during the same period.