Ethereum price under pressure as $6B options expiry nears

1 hour ago

Ether (ETH) has been incapable to prolong prices supra $3,400 for the past 40 days, raising concerns among traders that bears whitethorn stay successful power for longer.

Key takeaways:

$6B successful Ether options volition expire connected Dec. 26, with telephone (buy) bets outnumbering enactment (sell) instruments by 2.2 times.
Bears clasp the vantage unless ETH terms breaks $3,100.

The $6 cardinal ETH options expiry connected Dec. 26 could adhd further pressure, arsenic bulls had anticipated year-end prices of $4,000 oregon higher earlier the 28% clang successful November.

Ether’s terms astatine 8:00 americium UTC connected Friday volition find whether bears clasp control, contempt telephone (buy) options outnumbering enactment (sell) instruments by a origin of 2.2.

Deribit accounts for 70% of full unfastened interest, followed by the Chicago-based CME with 20%. However, astir of the $4.1 cardinal successful call (buy) options are acceptable to expire worthless connected Friday, arsenic traders concentrated bullish bets connected year-end Ether prices betwixt $3,500 and $5,000.

Less than 15% of aggregate telephone options were positioned astatine $3,000 oregon lower.

Even excluding overly optimistic calls astatine $5,000 and above, which apt carried constricted outgo to buyers, information shows that less than 25% of these instruments were placed beneath $3,200.

Traders often merchantability covered calls astatine $8,000 and $10,000 year-end strikes with nary realistic anticipation of reaching those levels.

While bulls were overly assured that Ether would reclaim $3,400 by year-end, bearish strategies whitethorn besides person gone excessively acold by clustering bets betwixt $2,200 and $2,900.

If Ether trades supra $2,950 connected Friday, much than 60% of the $1.9 cardinal successful aggregate enactment options volition expire worthless. Even so, bearish positions stay amended placed arsenic agelong arsenic ETH stays beneath $3,200.

Investors reacted to past Thursday’s reports that Intel failed successful its propulsion to manufacture precocious chips successful the US arsenic it sought to situation planetary person Taiwan Semiconductor (TSMC US).

According to Bloomberg, Nvidia (NVDA US) halted accumulation tests that relied connected Intel’s manufacturing processes.

ETH options traders spot heightened risk

As traders priced successful weaker prospects for the economical interaction of artificial quality successful the US, galore moved to hedge their ETH positions.

Demand for bearish ETH options strategies increased, including the “bear diagonal enactment spread,” “bear enactment spread,” and “bear telephone spread,” peculiarly aft aggregate failed attempts to reclaim the $3,400 level implicit the past 5 weeks.

$3,100 is cardinal for Ether bulls

Below are 4 probable scenarios for the year-end ETH aggregate options expiry based connected existent terms trends:

Between $2,700 and $2,900: The nett effect favors the enactment (sell) instruments by $580 million.
Between $2,901 and $3,000: The nett effect favors the enactment (sell) instruments by $440 million.
Between $3,101 and $3,200: Balanced result betwixt telephone and enactment options.
Between $3,201 and $3,300: The nett effect favors the telephone (buy) instruments by $150 million.

A Dec. 26 expiry beneath $2,900 could further weaken Ether capitalist sentiment. However, Ether bulls inactive person an accidental to propulsion prices toward $3,100 connected Friday, which would assistance equilibrium positioning and region Ether’s terms from the $2,775 December lows.

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