Ether’s (ETH) 81% rally in the last three weeks caught professional traders off guard, and the upcoming options expiration this week reveals that of the $ 430 million in contracts ready to expire, only the 7% of the neutral to bearish put options will be active if Ether sustains above $ 3,200 on August 13.
Interestingly, the cryptocurrency market is maintaining its recent strength despite the infrastructure deal “critical of cryptocurrencies” of the Senate that was recently approved. Although the trillion dollar infrastructure bill You may encounter some big hurdles in the House of Representatives, the approved version did not clarify what constitutes a cryptocurrency broker, and this is expected to hurt the industry in the future.
Institutional investors are likely to be behind the recent rally
Adoption by institutional investors continues to grow and This week Neuberger Berman, a New York-based investment management firm, introduced a fund focused on commodities. The commodities strategy fund, USD 164 million, plans to gain exposure to cryptocurrencies using trusts and exchange-traded funds.
Furthermore, the Coinbase exchange reported that 10 of the 100 largest hedge funds in terms of assets under management are clients of the platform. Even more interesting to Ether supporters was the Flippening that occurred when the exchange traded more volume of Ether than Bitcoin (BTC) in the second quarter of 2021.
Coinbase cited the emergence of new use cases, including decentralized finance (DeFi), non-fungible tokens (NFT) and smart contracts as the reason for the high volumes of Ether. Whatever the case that drove the price of Ether, the bulls now enjoy a wide advantage heading into the expiration of options tomorrow Friday.
Open interest shows an apparent balance between call and put options
Initial view shows a reasonable balance between neutral to bullish call options and protective put options, indicating that the bulls lacked confidence to bet on the recent rally.
In addition, more than half of the bets were opened between $ 2,100 and $ 2,900. These data clearly show that professional traders were not expecting a rally beyond $ 3,000.
The result is a small number of $ 2 million hedging put options that will participate in Friday’s option if Ether sustains above $ 3,200. This number increases to $ 19 million if the bears manage to drag the price below $ 3,100, and it rises to $ 27 million if Ether trades below $ 3,000 on August 13.
Bulls currently have a $ 165 million lead
$ 167 million in call options have been placed at $ 3,200 or less. The net result would then be a USD 165 million advantage for this instrument between neutral and bullish. This difference will be reduced to USD 120 million if the bulls fail to hold the support of the USD 3,100.
A negative 10% move from the $ 3,200 level would reduce the advantage of the neutral-to-bullish instrument to comfortable ones. USD 90 million. Therefore, there is no reason to believe that the bears are trying to push the price solely due to the expiration of the options on Friday.
Currently, the bulls are in full control and will likely use their profits to place additional bullish bets for the next few weeks.
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