ETH price failed to break previous all-time high (ATH), but derivative data signals that the bulls will do their best to keep the price above $ 4,000 for the short term.
Several analysts, including independent market analyst Scott Melker, believe The approval of an Exchange Traded Fund (ETF) based on Ethereum futures is the next logical step for the US Securities and Exchange Commission.
“I bet we’ll see an Ethereum futures ETF before a physical Bitcoin ETF is approved.”
Ether bulls are likely to make a profit of $ 78 million this afternoon (October 22nd) on the option expiration at 3pm. The bears seem surprised as the ETH price has risen 35% since the beginning of the month.
ETH price chart | Source: TradingView
Investor sentiment was also positively impacted by the Houston Firefighters Pension Fund, which announced a $ 25 million allocation to Bitcoin and Ether.
The ongoing decline in ether supply is also a major contributor to the recent bull run. According to Glassnode data, ether balances on the exchanges have hit a 2-year low.
Ether balance on exchanges | Source: Glassnode
Stock market deposits are declining, particularly in Ether, possibly as investors turn to DeFi in search of better returns. Although the selling pressure didn’t stop, the movement created a lasting momentum and used ETH 2.0 as a validator.
Bears stunned after ETH price breaks $ 4,000
Ether was trading below $ 3,000 just three weeks ago, and this partly explains why the bears today place 89% of their bets on the Ether trading at $ 4,000 or less.
Today’s expiring Open Interest (OI) total US $ 230 million in call options versus US $ 195 million in put options, with neutral to bullish instruments dominating. However, this view needs more detail at expiry depending on the price.
Ether Options Open Interest Summary for October 22nd | Source: Bybt
The current long to short ratio is wrong as the recent Ether rally is likely to ruin most bearish bets. For example, if the price of Ether is still above $ 4,000 this afternoon at 3:00 p.m., it’s only worth $ 22 million of the put option (put).
Bears have to push ETH under $ 4,000
Any price above $ 4,000 on expiry favors the bulls, but if it is above $ 4,200 the bulls’ net income rises to $ 136 million.
Here are the four most likely scenarios when looking at prices on the expiration date. The data shows how many contracts will be available to both parties today:
- From $ 3,600 to $ 4,000: 15,640 buy orders vs. 14,340 sell orders. The net result is a balance between the two.
- From $ 4,000 to $ 4,200: 25,000 buy orders vs. 5,440 sell orders. The net result gives the cops a profit of $ 78 million.
- From $ 4,200 to $ 4,400: 34,180 buy orders vs. 1,890 sell orders. The cops’ profits rise to $ 136 million.
- Over $ 4,400: 44,230 buy orders vs. 60 sell orders. The bulls completely dominate at $ 186 million.
This rough estimate looks at calls that are used in bullish and put strategies specifically for neutral to bearish trades. However, a trader may have sold a put, an effective way to get positive exposure to ether above a certain price. Unfortunately, there is no easy way to gauge this effect.
The bears need a 3% correction from the current price of $ 4,100 to avoid a loss of $ 78 million. While it may not seem like much, traders also need to consider recent positive news flows and on-chain indicators.
In less than 4 hours, the bulls will likely secure victory by holding ether above $ 4,000. It seems like the most logical path for the bears to focus on $ 1.1 billion monthly options that expire on October 29th
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