Ethereum $6K Christmas Odds Surge as Options Traders Reprice Tail Risk

The weekend rebound has revived bullish sentiment in the crypto market, with Ethereum drawing heightened attention as options activity signals growing expectations of a $6,000 price target by year’s end.

It comes as the broader financial landscape adjusts to a new trade agreement between the U.S. and the European Union, reached on Sunday, in a development that could signal evolving global risk sentiment.

The agreement, which affects roughly a third of global trade, imposes a 15% tariff on EU goods entering the U.S. and includes European commitments to purchase U.S. energy and defense equipment.

That’s a de-escalation of tensions seen earlier this year, which would have led to President Trump imposing 30% tariffs on European imports.

Clarity on trade relations and avoidance of escalations typically contribute to a more stable environment, allowing investors to be more comfortable with riskier assets, such as the stock market and cryptocurrencies. On the contrary, surprise tariffs trigger a risk-off sentiment.

Bitcoin has risen 4.45% since Friday from $115,000 to $119,812. Ethereum, meanwhile, has clocked an impressive 8.8% gain over the same period, climbing from $3,570 to $3,900.

Referring to last week’s sudden crypto market dip, Nick Forster, founder of on-chain options platform Derive, said: “Don’t let that distract from what’s been a monster month.”

Forster highlights an explosion in upside bets for Ethereum, with “the probability of $6,000 by December 25 more than quadrupling, from just under 7% at the start of July to over 30%. 

“That’s a massive re-pricing of tail risk,” he said.

That prediction echoes the sentiment of Charles Edwards, founder of Capriole Fund, who expects a new all-time high for Ethereum within the next “Six to 12 months.”

Looking ahead

Bitcoin has held near record highs without the usual signs of market froth. Implied volatility and funding rates, often indicators of speculative excess, have remained low, suggesting investors view the rally as more stable. 

Analysts say the shift reflects structural changes since the launch of U.S. spot Bitcoin ETFs, which have made it easier for traditional investors to gain exposure without relying on leverage.

Forster acknowledges this and says, “Mike Novogratz’s $150,000 prediction” isn’t some “moonshot” anymore. “Options markets now imply a 52% chance of Bitcoin hitting $150,000 by year-end.”

A look at December’s implied volatility profiles for the two leading cryptocurrencies shows a muted 30% for Bitcoin, while Ethereum’s is double at 60%. Forster expects “a smoother climb for the former, and a wilder ride for the latter.”

“New on-ramps like ETFs and broader fiat access have infused steady liquidity.” Pauline Shangett, CSO of crypto exchange ChangeNOW, told Decrypt. This has kept “implied volatility remarkably low even as Bitcoin marks new all-time highs.”

Consequently, the popular four-year cycle story is being “rewritten” amid maturing industry participants, Shangett said.

The spike in implied volatility for Ethereum comes as Solana’s odds of clearing $300 by December 25 fell from 45% to 36%. The drop comes after an impressive climb from 25% to 45% in just 10 days.

Touching on capital rotation and alt season, Shangett says that “altseason” will be more “subdued and selective” and rotations “favoring established assets over speculative surges.”

While the long-term outlook for crypto, particularly Ethereum, remains bullish, the economic calendar this week is packed with market-moving events. 

Investors will be closely watching Wednesday’s Federal Reserve and Bank of Japan interest rate decisions at 2 pm and 11 pm ET, respectively. 

The U.S. economy is expected to add 110,000 jobs in July, according to forecasts ahead of Friday’s nonfarm payrolls report.

Forster also highlights “President Trump hinting at firing Jerome Powell as chair of the Federal Reserve” is a key development to watch as it could “trigger a lower interest rate regime,” kicking off a “buying frenzy in majors, and eventually, alts.” 

The prospect of a looser monetary policy environment under a new Fed leadership could further fuel momentum in digital assets, especially if it aligns with the options market’s growing confidence in significant year-end rallies for Bitcoin and Ethereum.