Ether's (ETH) $1.5 billion monthly expiry on June 25 was slightly favorable for bears, and at the time, Cointelegraph reported that the $2,200 price was critical to eliminate 73% of the neutral-to-bearish put options. 

However, bulls were not able to sustain their advantage because the expiry price was near $1,950. In the end, the protective put options outnumbered the neutral-to-bullish call options by $30 million.

Fast forward to July, and after a noticeable 10% rally, Ether's price again struggles to sustain the $2,100 support. Bitcoin's negative 3.5% performance could partially explain last week's price move, but the London hard fork scheduled for this month could also be responsible.

The proposal EIP-1559 will cap gas fees, making it more predictable for users. However, miners' revenue will be negatively impacted. Any pushback from miners could delay Eth 2.0 even more, which could be a reason for the recent price weakness.

Lastly, regulatory pressure could also be blamed for the negative sentiment. For example, the United States Financial Crimes Enforcement Network announced that cryptocurrencies would be among its top national priorities for countering terrorism financing and ensuring proper Anti-Money Laundering policies.

Related: Bulls and bears fight over $34K Bitcoin price as $445M options expiry looms

Bulls have a slight advantage, but overall the expiry should be small

The July 2 $230 million Ether options expiry perfectly reflects a scenario where both bulls and bears expected extreme price changes.

Chart

Ether’s July 2 aggregate options open interest. Source: Bybt

110,000 Ether contracts seem initially balanced between the call (buy) and put (sell) options. However, only 30% of the neutral-to-bullish call options have been placed at $2,200 or below, which is equivalent to a $36 million open interest. The remaining 70% of the call options are unlikely to take part in Friday's expiry.

On the other hand, protective puts were mostly placed at $1,900 and lower. However, these contracts are now worthless as there are less than 14 hours before they expire. Therefore, the remaining neutral-to-bearish options down to $2,100 amount to a $26 million open interest.

In a nutshell, Friday's Ether expiry will be relatively small, but the $2,200 mark is extremely important. Above that level, the bulls' lead increases by $18 million, causing a $28 million imbalance that favors call options.

Bears aim for $2,100 or lower to eliminate the bulls' advantage

For bears, any expiry price below $2,100 is enough to balance out the situation. However, it is worth noting that Friday's expiry size has been greatly reduced because both sides had extreme bets, but none of them were fulfilled.

At the time of writing, there is no reason to believe that either side will try to force Ether's price in a particular direction ahead of the expiry. Traders will likely concentrate their bets (and efforts) for the end of July, depending on whether or not the London hard fork faces any delays or surprises.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Recommended content


Recommended Content

Editors’ Picks

US presidential election outcome could shape the future of crypto

US presidential election outcome could shape the future of crypto

US citizens will go to the polls to elect a new president on November 5, and their choice could be key for the future of the crypto industry and thus the price outlook for Bitcoin (BTC).

More Cryptocurrencies News
Bitcoin ETFs beat Gold ETFs with 65% gain since launch

Bitcoin ETFs beat Gold ETFs with 65% gain since launch

Bitcoin ETFs have reshaped the digital asset investment landscape since their approval in January. Their total assets under management climbed over $70 billion during the weekend, placing them ahead of other investment products, including gold.

More Bitcoin News
XRP eyes 10% rally amid relisting across crypto exchanges and growing institutional demand

XRP eyes 10% rally amid relisting across crypto exchanges and growing institutional demand

Ripple's XRP is trading at $0.5050 up slightly by 0.2% in the past 24 hours as it struggles to sustain a move above a key symmetry triangle resistance. Meanwhile, in its recently released Q3 report, Ripple noted the rising listing and relisting of XRP across crypto exchanges and global platforms.

More Ripple News
Ethereum Price Forecast: ETH struggles below $2,500 amid State of Michigan pension fund investment in ETH ETF

Ethereum Price Forecast: ETH struggles below $2,500 amid State of Michigan pension fund investment in ETH ETF

Ethereum is trading near $2,420, down about 1% on Monday, but could bounce off a key descending trendline close to the $2,258 historically high demand zone. Meanwhile, the State of Michigan pension fund revealed an investment of $11 million in ETH exchange-traded funds.

More Ethereum News
Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP