The monthly expiration of Ether (ETH) of 1.5 billion
However, the bulls were unable to maintain their advantage as the expiry price neared $ 1,950. In the end, the protective put options outperformed the neutral to bullish call options by $ 30 million.
Fast forward to July and after a noticeable 10% rally, the price of Ether is struggling again to maintain the $ 2,100 support. Bitcoin’s (BTC) negative performance of 3.5% could partially explain last week’s price movement, but the London hard fork planned for this month could also be responsible.
The Ethereum Improvement Proposal (EIP) 1559 will cap gas fees, making them more predictable for users. However, the miners’ income will be negatively affected. Any pushback from miners could delay Ethereum 2.0 even further, which could be a reason for the recent price weakness.
Finally, regulatory pressure could also be responsible for the negative sentiment. For example, the United States Financial Crimes Enforcement Network announced that cryptocurrencies would be a top national priority for combating terrorist financing and ensuring adequate anti-money laundering policies.
Connected: Bulls and bears battle for the $ 34,000 bitcoin price as the $ 445 million expiration of options looms
Bulls have a slight advantage, but overall the expiration date should be small
The $ 230 million expiry in ether options on Friday perfectly reflected a scenario in which both bulls and bears expected extreme price changes.
Ethers aggregated open interest for options as of July 2nd. Source: Bybt
Around 110,000 Ether contracts initially seem to be balanced between the call (buy) and put (sell) options. However, only 30% of the neutral to bullish call options were placed at $ 2,200 or below, which equates to an open interest of $ 36 million. The remaining 70% of the call options are not expected to participate on the Friday expiration date.
On the flip side, protective puts have mostly been placed at $ 1,900 and below. However, these contracts are now worthless as they have less than 14 hours before expiration. Therefore, the remaining neutral to bearish options are up to $ 2,100 on $ 26 million open interest.
In short, Friday’s Ether spout will be relatively small, but the $ 2,200 mark is extremely important. Above that level, the bulls’ lead increases by $ 18 million, creating a $ 28 million imbalance that favors call options.
Bears are targeting $ 2,100 or less to remove the bulls’ advantage
For bears, any expiry price below $ 2,100 is sufficient to make up for the situation. However, it is worth noting that the expiry size was greatly reduced on Friday as both sides had extreme bets but neither of them was met.
At the time of writing, there is no reason to believe that either side will attempt to push the price of Ether in any particular direction before it expires. Traders will likely focus their bets (and efforts) towards the end of July depending on whether or not the London hard fork faces delays or surprises.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading movement carries risks. You should do your own research when making a decision.