Ether has been facing a bearish retracement channel since September 1, although it is currently struggling to break the resistance.
But despite some difficulties, the bulls should benefit from $ 115 million today (Oct. 8) at the expiration of the weekly ether option. Last week’s 21% pump was just enough to render neutral to bearish put options worth $ 250 million worthless.
Ether price chart | Source: TradingView
Regulatory fear limits ether price growth
Negative reports of increased regulatory oversight of cryptocurrencies may have impacted the market last month, especially as China has completely banned all crypto-related activities.
Major exchanges like Binance and Huobi have suspended most of their services in mainland China, and several large Ethereum mining pools have also had to close entirely.
And not only that, Ken Griffin, founder of Citadel Securities, one of the largest market makers in the world called They do not trade cryptocurrencies due to the regulatory uncertainties in the industry. Anatoly Aksakov, chairman of the Financial Markets Committee of the Russian State Duma, also emphasized the tightening of the regulations to protect private investors.
With the barrage of negative news in it, it’s understandable why the bears put 86% of their stakes on $ 3,200 or less. In the past few weeks, however, these put options have depreciated rapidly.
Today will be a test of strength for the bears as any price over $ 3,500 would mean a carnage with a dominance of call options.
Ether Options OI recap for October 8th | Source: Bybt
At first glance, the neutral to bearish options of $ 250 million dominated the weekly expiration of 16% versus the call of $ 210 million.
The call-to-put ratio is deceptive, however, as the recent rally is likely to undo most of their bearish bets if the price of Ether stays above $ 3,500 at 3pm today (Hourly Synthetic Team).
Bears should give up and lose $ 115 million
Notably, 94% of put options where the buyer has the right to sell ether at a preset price are set at $ 3,500 or less. These neutral to bearish options would become worthless if Ether traded above this price by today’s option expiration.
Here are the four most likely scenarios, considering current prices, as an imbalance in favor of either party represents potential gains from the expiry.
- From $ 3,100 to $ 3,300: 14,300 buy orders vs. 9,800 sell orders. The net result is a balance between the bulls and the bears.
- From $ 3,300 to $ 3,500: 21,650 buy orders vs. 1,900 sell orders. The net result favors the cops with $ 66 million.
- From $ 3,500 to $ 3,700: 32,050 buy orders vs. 0 sell orders. The net result favors the bulls with $ 115 million.
- From $ 3,700 to $ 3,900: 43,300 buy orders vs. 0 sell orders. The bulls dominate at $ 165 million.
This rough estimate looks at calls that are used in bullish and put strategies specifically for neutral to bearish trades. Unfortunately, life is not that simple as more complex investment strategies may be in the works.
Bears have a $ 47 million advantage if they can push ETH below $ 3,500, as the above estimate shows. The cops, on the flip side, can add $ 49 million to their edge by increasing the Ether price to over $ 3,800 before it expires.
With things stabilizing for the moment, the bulls have absolute control of the option on expiry and the momentum for both sides appears to be in equilibrium. Hence, the bears should give up and prepare for the options expiration next week.
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According to Cointelegraph