Ether (ETH) entered a less bullish channel earlier this month and is currently approaching the $ 3,800 level. Despite the recent turmoil, Ether Bulls will have a profit of $ 53 million by the end of the weekly option on Oct 15.
It also looks like investors are not interested in the latest Ethereum performance in relation to Bitcoin (BTC), and so far the altcoin profit is 265%. If Ether manages to stay above $ 3,600 on Friday, 99% of the put options ($ 180 million) will be worthless.
Ether price on Bitstamp in USD. Source: TradingView
Ethereum smart contract competitors continue to put pressure on the leading network and, at the time of writing, the average gas price for Ethereum remains above $ 20. Internet of Things (IoT) applications and solutions that bridge reliable networks.
This week, Binance Smart Chain unveiled plans to launch a $ 1 billion fund to accelerate adoption in the crypto industry. Investors often interpret potential incubation events supported by blockchain projects as optimistic for their initial assets, and BNB’s price has risen at least 30% since the announcement.
The bears did not expect prices to rise above $ 3,300.
Based on some negative news in the past, you can see why the Bears made 88% of their bets at $ 3,300 or below. If the bulls were less greedy, they could control the $ 365 million expiration on October 8th.
The expiration date of October 15 is perfectly balanced between buying (buying) and selling (selling) options in accordance with the ratio of long and short positions. However, this bird’s eye view requires more detail, depending on the expiration price.
General open interest in October 15 Ether futures. Source: Bybt.
On the surface, both parties hold $ 180 million in ether options, as shown by a buy-to-sell ratio of 1.03.
This figure is misleading, however, as Ether’s recent rally is likely to negate most of its bearish bets. For example, if Ether stays above $ 3,500 by 08:00 UTC on Friday, only $ 6.6M (put) sales will be available.
Bulls are comfortable – $ 3600
Any expiration price in excess of $ 3,500 is a bear trap, although the $ 32 million gain should not be enough to cause harm. By comparison, a monthly ether option has over $ 800 million in open interest.
Below are the four most likely scenarios based on current price levels, where the imbalance in favor of each side represents the theoretical potential return at maturity.
The data shows the number of contracts that will be available on October 15th for both calls and puts.
Between $ 3300 and $ 3500: 7450 requires 3550 pips. Bulls netted $ 13 million;
Between $ 3500 and $ 3600: 11,150 requires 1900 pips. Bulls netted $ 32 million;
Between $ 3600 and $ 3800: $ 15,400 requires 600 pips. Bulls’ profits increase to $ 74 million.
Over $ 3800: 27,450 requires 0 clubs. The Bulls have a profit of $ 104 million.
This rough estimate takes into account the buy (buy) options used in bullish strategies and put (sell) options exclusively in neutral or bearish trades. However, the trader would sell the put option and actually receive a positive share of the ether above a certain price. Unfortunately, there is no easy way to assess this effect.
Bears need less than $ 3,500 to balance their weight.
The bulls’ profits increase to $ 104 million on Ethereum trading over $ 3,800, up $ 30 million from the estimated current profit of $ 74 million. On the other hand, as the estimate above shows, from the perspective of the bear, keeping the price below $ 3,500 yields a gain of $ 61 million.
With just over a day left before the end of October 15, it will be difficult for the bears to suppress the current trend. Despite the competition facing the Ethereum network and high gas taxes, investor demand for decentralized finance (DeFi) and non-volatile tokens (NFT) seems to be enough to keep Ether going.