Bulls & bears are similarly nervous about the likely outcome of the June 25 $1.5 billion ETH choices expiry.
On June 25, Ether will face its main options expiry in 2021 as $1.5B value of open interest will be settled. This figure is 30% superior than March’s 26 expiry, which took place as ETH price plunged 17% in 5 days & bottomed near $1,550.
Though, Ether united 56% after March’s options expiry, attainment $2,500 within three weeks. These moves were wholly uncorrelated to Bitcoin’s. Consequently, it is vital to understand if a alike market structure could be happening for June 25 futures & choices expiry.
Latest history displays a mix of bullish & bearish catalysts
On March 11, ETH miners organized a “show of force” contrary to EIP-1559, which would meaningfully decrease their revenues.
The situation deteriorated on March 22, as CoinMetrics hurled an “ETH Gas Report,” uttering that the highly expected EIP-1559 network upgrade would improbable resolve the high gas problem.
Things ongoing to modification on March 29, as Visa announced strategies to use the ETH blockchain to settle a transaction made in fiat, & on April 15, the Berlin upgrade was positively applied. Rendering to Cointelegraph, after Berlin launched, “the average gas fee began to failure to more manageable levels.”
Before jumping to assumptions & gambling whether these marvels of the Ether price bottoming near the future $1.5 billion options finish are bullish or bearish, it’s best first to examine how large traders are located.
Take sign of how June’s expiry holds over 638K ETH choices contracts, totaling 45% of the aggregate $3.4B open interest.
Different futures contracts, choices are alienated into 2 segments. Call (buy) choices permit the buyer to obtain Ether at a fixed price on the finish date. Usually speaking, these are rummage-sale on neutral arbitrage trades or bullish strategies.
Temporarily, the put (sell) choices are commonly used to hedgerow or defend from negative price swings.
For bulls, $2,200 is the line in the sand
As showed above, there is a uneven amount of call options at $2,200 & higher strikes. This means that if ETH’s price on June 25 occurs to be below this level, 73% of the neutral-to-bullish options will be valueless. The 95K call options quiet in play would signify a $228M open interest.
On the other hand, most defensive put choices have been opened at $2,100 or lower. So, 74% of those neutral-to-bearish options will become valueless if the price breaks above this level. Therefore, the left over 73,700 put choices would represent a $177M open interest.
It appears premature to call who strength be the winner of this race, but seeing Ether’s current $2,400 price, it looks like both sides are sensibly comfortable.
Though, traders should keep a close eye on this occasion, particularly considering the price influence that surrounded the March finish.