Volatility expected as $490 million worth of ETH options expire shortly after Ethereum merger
The outcome of the Ethereum merger will be a major price rally that will dictate whether ETH takes advantage of the 490 million options expiry dollars this week.
Market analysis
Given the current state of the broader crypto market, some traders might be surprised to learn that Ether (ETH) has been trading higher over the past 17 days. While the entire cryptocurrency market saw a 10% drop on September 13, Ether's price held near the $1,570 support level.
Ether/USD price index. Source: TradingViewIn less than 12 hours, the Ethereum network is set to undergo its biggest ever upgrade and the possibility of extreme volatility should not be ignored. Transitioning to a proof-of-stake network will be a game-changer for several reasons, including a 98.5% reduction in power consumption and a reduction in coin inflation.
During an upgrade, there is always a risk of multiple malfunctions, especially in more complex systems like the processing of the Ethereum virtual machine. Even though the upgrade was relatively smooth on previous versions of testnet, it is impossible to predict the outcome of decentralized applications and second-layer solutions connected to the Ethereum ecosystem.
This is precisely why the $490 million Ether options expiration on August 16 will put strong price pressure on both sides, although the bulls look slightly better positioned as Ether nears $1,600 .
Most bearish bets are placed below $1,600Ether's failure to break through the $2,000 resistance on August 14 and its subsequent drop to $1,420 on August 29 gave the bears a signal that they expected the downtrend to continue . This becomes evident as only 12% of the puts (puts) on September 16 were placed above $1,600. Thus, Ether bulls are better positioned for the weekly options expiration of $490 million.
Ether options aggregate open interest for September 16. Source: CoinGlassA broader view using the call-to-put ratio of 1.06 shows a relatively balanced situation with bullish bets (call...
The outcome of the Ethereum merger will be a major price rally that will dictate whether ETH takes advantage of the 490 million options expiry dollars this week.
Market analysis
Given the current state of the broader crypto market, some traders might be surprised to learn that Ether (ETH) has been trading higher over the past 17 days. While the entire cryptocurrency market saw a 10% drop on September 13, Ether's price held near the $1,570 support level.
Ether/USD price index. Source: TradingViewIn less than 12 hours, the Ethereum network is set to undergo its biggest ever upgrade and the possibility of extreme volatility should not be ignored. Transitioning to a proof-of-stake network will be a game-changer for several reasons, including a 98.5% reduction in power consumption and a reduction in coin inflation.
During an upgrade, there is always a risk of multiple malfunctions, especially in more complex systems like the processing of the Ethereum virtual machine. Even though the upgrade was relatively smooth on previous versions of testnet, it is impossible to predict the outcome of decentralized applications and second-layer solutions connected to the Ethereum ecosystem.
This is precisely why the $490 million Ether options expiration on August 16 will put strong price pressure on both sides, although the bulls look slightly better positioned as Ether nears $1,600 .
Most bearish bets are placed below $1,600Ether's failure to break through the $2,000 resistance on August 14 and its subsequent drop to $1,420 on August 29 gave the bears a signal that they expected the downtrend to continue . This becomes evident as only 12% of the puts (puts) on September 16 were placed above $1,600. Thus, Ether bulls are better positioned for the weekly options expiration of $490 million.
Ether options aggregate open interest for September 16. Source: CoinGlassA broader view using the call-to-put ratio of 1.06 shows a relatively balanced situation with bullish bets (call...
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