A large number of Ethereum options contracts are expiring soon. Big enough to shake up ETH price and crypto markets? Let’s answer…
How will the crypto market react to expiring Ethereum options?
Crypto derivatives traders have been more busy with Ethereum options than Bitcoin lately. As a result, around 217,000 ETH options contracts are about to expire. Also, its maximum pain point is $1,950 and its notional value is at $4.2 billion.
The maximum pain point is the strike price of the most open Ethereum options contracts. Additionally, it represents the price at which ETH will cause financial losses for the largest number of contract holders at maturity.
It is also very close to the price Ethereum is currently trading at. Options allow speculators to buy or sell Ethereum at a certain price, strike price, and with the ‘option’ to sell at any time. They are more flexible than futures contracts with fixed expiry dates.
Are Ethereum options bearish?
For ETH options, anything with a buy/sell ratio of 0.83 and higher than 0.7 to 1 is generally considered bearish.
The sell/buy ratio is calculated by dividing the number of short contracts traded by the number of long contracts. Values higher than 0.7 or 1 are bearish because more traders buy very short contracts than long contracts.
Also, around 25,000 Bitcoin options contracts are expected to expire soon. Their maximum pain point is $29,000 and their notional value is $0.72 billion, according to Greeks Live.
The put/buy ratio for BTC options is 0.7, which is generally considered neutral. Therefore, current rates are not leaning overwhelmingly in any direction, once they expire the market impact will be minimal.
Ethereum price drops
Kraken wallets have recently withdrawn a large amount of staked ETH. The move has been bearish for Ethereum, which has started to pull back from its eleven-month high.
ETH price is down 8.5% since its 2023 high on April 17. At the time of writing, it is trading in the $1,910 region, where it has lost 2.5% on the day.
The resistance at $2,100 is too strong to be overcome and the markets need a correction. Further downside could lead ETH to find support in the $1,850 price zone.
Binance and Lido release billions of dollars worth of ETH
It’s been more than a week since Ethereum’s highly anticipated Shapella update finally took place. While there were many expectations, many ETH investors were worried about the potential selling pressure from validators unlocking their ETH. cryptocoin.comAs we reported, Binance has recently started withdrawals.
According to the analysis, validators withdrawing their ETH have a 12-day waiting period for the Shapella upgrade to withdraw all staked ETH. It also revealed that there were 19,500 validators in the withdrawal queue and 7,800 validators in the deposit queue.
(1/7) 8 days after Ethereum’s #ShanghaiUpgrade, what’s the current state of $ETH staking withdrawals?
In this Chart of the Week, we take a look at key figures and what data to monitor as an Ether investor 🧵 pic.twitter.com/o2bHIsjXTG— CoinShares (@CoinSharesCo) April 20, 2023
As a result, there were concerns about potentially increasing withdrawals, especially as more than 95% of validators have yet to withdraw. ETH price is free from heavy selling pressure so far, just defending the lost $2,000 support.
