Ethereum

Ethereum Price Analysis: All Eyes on ETH’s $1.15B Options Expiry!

As the ETH community is gearing up for the Ethereum Berlin upgrade, If the options expiry results in a drop below the $1600 mark. The current optimism derived from rising deposits in the ETH 2.0 contract and leveraged trades is likely to fade. When Ethereum is overleveraged and traders are overconfident, there is typically a shift in the HODLing pattern and a change of hands before the altcoin rallies to the ATH.

Ether (ETH) has recovered from a low of $1,550 on March 24, a 17 percent drop from the $1,870 weekly high. Even though the $1.15 billion options expiry in the early hours of March 26 might have weighed on Ether’s price, the continued increase in gas fees for Ethereum transactions is more than likely to have played a role.

Although the Ether price was quite stable at $1,630 at the time of the option expiry, there needs to be some indication of top traders reverting the previous price pressure. Well if this is not the case, then there should be no reason to speculate that the recent sell-off was concerned by the options expiry.

In response to the options-induced price drop speculation, CoinMetrics published a study claiming that the much-anticipated EIP-1559 network upgrade would not fix the issue of high gas costs. Only scaling solutions, according to the study, will truly solve the problem. As a result, top traders will have more pressing concerns, putting downward pressure on the price of Ether regardless of the expiry date.

Traders Close Ethereum Longs

ETH positions

Long-to-short net positioning is given by major cryptocurrency exchanges. The traders combined position on the spot, permanent, and futures contracts are used to measure this indicator. As a result, it’s easier to see whether experienced traders are bullish or bearish. Due to occasional procedural discrepancies between various exchanges, one should always monitor changes instead of absolute figures.

Top traders have been reducing their positions over the last 48 hours, as seen in the chart above, and the trend has continued after the options have expired (orange bar). These whales and arbitrage desks increased their exposure as the price of Ether fell 10% on March 24 and have since profited. 

It also cannot be ignored that the 1.56 ratio favoring longs on OKEx was the massive level seen in March, hinting that top traders were optimistic that the $1,550 support would hold.

A similar trend took place at Huobi, where top traders’ net long-to-short ratio peaked at 0.96 on March 25. Albeit slightly favoring shorts, the indicator hadn’t seen such levels since March 7. Therefore, it further signals that there was no selling pressure targeting the March 26 options expiry. As of the current situation, there’s no reason to believe that options markets have impersonated the price.

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Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

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