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.
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
Editors’ Picks
Polygon joins forces with WSPN to expand stablecoin adoption
WSPN, a stablecoin infrastructure company based in Singapore, has teamed up with Polygon Labs to make its stablecoin, WUSD, more useful in payment and decentralized finance.
Coinbase envisages listing of more meme coins amid regulatory optimism
Donald Trump's expected return to the White House creates excitement in the cryptocurrency sector, especially at Coinbase, the largest US-based crypto exchange. The platform is optimistic that the new administration will focus on regulatory clarity, which could lead to more token listings, including popular meme coins.
Cardano's ADA leaps to 2.5-year high of 90 cents as whale holdings exceed $12B
As Bitcoin (BTC) gets closer to the $100,000 mark for the first time — it crossed $99,000 earlier Friday — capital is rotating into alternative cryptocurrencies, creating a buzz in the broader crypto market.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: Rally expected to continue as BTC nears $100K
Bitcoin (BTC) reached a new all-time high of $99,419, just inches away from the $100K milestone and has rallied over 9% so far this week. This bullish momentum was supported by the rising Bitcoin spot Exchange Traded Funds (ETF), which accounted for over $2.8 billion inflow until Thursday. BlackRock and Grayscale’s recent launch of the Bitcoin ETF options also fueled the rally this week.
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.