The bears are better positioned to post around $215 million in profits at the time of ether options expiration in November, putting the ether price under pressure near a significant re-trade.

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1,323 dollars

There is little hope for the bulls in the long run or on the weekly timeframe. Combined with the 69% negative performance YTD, the descending channel is putting pressure on Ethereum price as it offers resistance at $1,200.

Ether/USD price index 4 hours. Source: TradingView
Legislative uncertainty continues to put pressure on the industry. For example, Starling, a UK-based digital bank, announced on November 22 that it will no longer allow its clients to send or receive money from digital asset exchanges or traders. The bank described cryptocurrencies as “high risk and heavily used for criminal purposes”.

Other troubling news for the Ethereum ecosystem included decentralized finance (DeFi) platform Aave, which was attacked by short selling on November 22 to profit from unsecured loans.

Interestingly, a similar exploit occurred on the Mango Markets DeFi app in October. Although the attacker was not a direct attack on the Ethereum network, it exposed serious flaws in some large decentralized side lending applications.

Also, Singapore-based cryptocurrency lender Hodlnaut is said to be facing a police investigation over fraud and fraud allegations. The issuances began on August 8 after the lender pointed to a liquidity crisis and suspended withdrawals on the platform.

Finally, on November 22, US Senator Elizabeth Warren attributed the collapse of the FTX stock market to the 2008 subprime mortgages and penny stocks used in pump-and-dump plans. Warren said the collapse of FTX should have been a “wake-up call” for regulators to enforce regulations regarding the cryptocurrency industry.

Therefore, although ETH is up 11% from November 22-24, the expiration of $1.13 billion monthly Ether options on November 25 will put a lot of price pressure on the bulls.

Most bullish bets are placed above $1,400.
Ether’s rally towards the $1,650 resistance on November 5 gave a signal to the bulls to wait for the uptrend to continue. This becomes apparent as only 17% of call (buy) options for November 25 are placed below $1,400. Therefore, bears in Ether are better positioned for the upcoming $1.13 billion monthly option expiration.

Ether Options pool open on November 25. Source: CoinGlass
A broader view using a call-to-call ratio of 1.44 shows a skewed position with $665 million of open bulls (calls) and $460 million of put (sell) options. However, Ether is currently hovering around $1,200, with the bears in a dominant position.

For example, if the price of Ether stays below $1,250 on November 25 at 08:00 UTC, only $40 million worth of call (buy) options will be available. This difference occurs because the right to buy Ether at $1,250 or $1,500 is of no use if it trades below this level at expiry.

Bears could earn $215M
Here are the four most likely scenarios based on the current price action. The number of options contracts available for buy (bullish) and sell (bear) instruments on November 25 varies depending on the expiry price. The imbalance in favor of both parties constitutes the theoretical gain:

Between $1,050 and $1,150: 800 calls for 20,200 sales. The net result supports the Bears with $215 million.
From $1,150 to $1,250: 3,300 searches 15,100 points. The net result supports negative bets of $140 million.
Between $1,250 and $1,300: 4,700 searches 13,200 points. The net result supports the Bears with $100 million.
Between $1,300 and $1,400: 8,700 calls equals $8,900. The net result is balanced between bulls and bears.
This rough estimate takes into account the buy options used in bullish bets and uses options only in neutral to bearish trading. But this oversimplification ignores more complex investment strategies.

A 7-year dormant bitcoin wallet could complicate things for ether bulls
Ether bulls need to push the price above $1,300 on November 25 to stabilize the metrics and avoid a potential loss of $215 million. However, ether bulls appear to be out of luck, as a bitcoin wallet related to the 2014 Gox mountain hack on November 23 carried 10,000 bitcoins.

Ki Young Ju, co-founder of blockchain analytics firm CryptoQuant, confirmed the results by stating that 0.6% of the funds were sent to exchanges and could represent sell-side liquidity.

The expiration of ETH options in November is swayed by sellers.

Source: CoinTelegraph