Overly-confident Ethereum options traders are nervously watching the $3,200 level ahead of this week’s $800 million ETH options expiry.
Эфир (ETH) will face a critical $820 million monthly options expiry on Friday, Авг. 27. That will be the first time that $3,000 and higher options will have a real fighting chance, even though bulls seem to have missed a good opportunity to dominate the expiry because they were too optimistic about Ether’s price potential.
It is unclear why $140 million of the neutral-to-bullish call options were placed between $3,800 и $8,000, but these instruments will likely become worthless as the monthly expiry approaches.
Competition and the success of interoperability-focused protocols impact Ether price
The Ethereum network has struggled due to its own success, which consistently leads to network congestion and transaction fees of up to $20 и выше. более того, the rise of nonfungible tokens and decentralized finance imposed further stress on the network.
Maybe some of the inflow that was supposed to move Ether price up went to its competitors, which presented stellar performances recently. Например, Кардано (ЕСТЬ) surged over 100% quarter-to-date as investors expect its long-awaited smart contracts to launch on Sept. 12.
Солана (СОЛЬ), another smart contract contender, captured one-third of the inflows to crypto investment products over the last week, according to CoinShares “Digital Asset Fund Flows Weekly.”
Наконец, layer-two scaling solutions like Polygon (MATIC) have also seen 150% gains after successfully bringing DeFi projects into its interoperability pool and launching a decentralized autonomous organization (DAO) to scale projects on the software development kits.
Notice how the $3,000 level vastly dominates Friday’s expiry with 30,900 ETH option contracts, представляющий $100 million open interest.
The initial call-to-put analysis shows a slight prevalence of the neutral-to-bullish call instruments, с участием 13% larger open interest. тем не мение, bears seem to have been taken by surprise because 83% of their bets have been placed at $2,900 или ниже.
To succeed, bears need to push and hold Ether price below $2,900
Nearly half of the neutral-to-bullish call options have expiry prices set at $3,500 или выше. These instruments will become worthless if Ether trades below that price on Friday. The options expiry happens at 8:00 утра UTC, so traders might expect some price volatility nearing the event.
Below are the three most likely scenarios that will likely happen and their estimated gross result. Keep in mind that some investors could be trading more complex strategies, including market-neutral ones that use calls and protective puts. вследствие этого, this estimation is somewhat rudimentary.
The simplistic analysis weighs the call (купить) options against the put (продавать) options available at each strike level. Так, например, if Ether’s expiry happens at $3,050, every neutral-to-bullish call option above $3,000 becomes worthless.
- Ниже $2,900: 36,360 звонки против. 32,700 ставит. The net result is virtually balanced.
- Между $2,900 и $3,000: 36,770 звонки против. 20,320 ставит. The net result favors the neutral-to-bullish instruments by $48 миллион.
- Между $3,000 и $3,200: 55,660 звонки против. 8,320 ставит. The net result favors the neutral-to-bullish instruments by $147 миллион.
- Выше $3,200: 62,260 звонки против. 1,490 ставит. The net result favors the neutral-to-bullish instruments by $197 миллион.
Bears will try to minimize the damage, and luckily for them, the honeypot for a favorable price move doesn’t look worthwhile of a significant effort from bulls.
As for the excessively optimistic options traders, they should better rethink their strategy for the September expiry. The Ethereum network seems to be its own biggest enemy because the increasing adoption has fueled the rise in competitors’ decentralized finance applications.
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