Where Ethereum will lead after the options expire this week is a million dollar question

It has been 10 days since the beginning of October and the daily chart of Ethereum still looks more or less similar to what it did in September. The Alt price recovered in the first few days of both months and then gave way by going into consolidation mode.

Nonetheless, this new month has seen a slight twist in history – the candles have hit higher lows in the daily timeframe. Additionally, last month’s Sundays have been pretty dramatic, while this time they seem less so.

ETH / USDT || Source: TradingView

In fact, volatility has dropped from 82.23% to 71.79% in just five days, and that’s mainly why the price of Ethereum has fluctuated between $ 3.5k and $ 3.6k recently.

Interestingly, the Alt’s velocity has also shown a trend reversal since the beginning of this month. The same has become less turbulent compared to September.

Simply put, an uptrend on the price charts is usually accompanied by a steady pace while turbulent landscapes pave the way for corrections. Thus, the current state of this metric has opened the doors to a steady rally.

What the foreseeable future looks like

Well, the assessment of the broader trader sentiment at this stage would further help us infer whether or not the uptrend narrative is accurate in the short term.

According to data from Skew, over 103.9k Ethereums will expire in three batches this week – 9.9k on October 10, 5.7k on October 11, and the remaining 88.3k on October 15.

Source: Skew

A bird’s eye view would instinctively suggest that the number of call contracts dominates the process. However, a closer look at the attached chart would show that puts have the upper hand in the strike price band below $ 3.2,000.

Source: Skew

After rising more than 5% weekly, the largest alt was trading at around $ 3.6k at the time of writing. Additionally, it should be noted that the $ 3.5k region has tilted from resistance to support since the 6th of this month.

Hence, the chances that the price of Ethereum will drop below the same level in the coming days seem to be pretty slim compared to the chances that the price will hold the current level. So if the price of Ethereum hovers around 3.5k USD or inches above it, it can be assumed that a buying frenzy has set in, as this would lead to call holders exercising their option to buy their respective ETH tokens.

Otherwise, the environment would be favorable for put holders to exercise their put option at the strike price. Indeed, bearish sentiment would creep into the market.

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