Home News Ethereum bulls maintain control ahead of $730M ETH options expiry

Ethereum bulls maintain control ahead of $730M ETH options expiry


On Friday, May 14, the $ 730M Ethereum options will expire.

An option is a contract that gives a buyer the right to buy or sell an asset at a specified price or until a specified date. In other words, this derivative allows the client to make a transaction with Ethereum until May 14, inclusive. If this is not done before the expiration date, the contract will become invalid.

The options are split into two segments as call (buy) options allow the buyer to purchase ether at a fixed price on the expiration date. They are often used in either neutral arbitrage trades or bullish strategies.

Meanwhile, put (sell) options are the preferred hedging instrument to protect against negative price fluctuations.

Ether-optimistic traders have a $ 109 million lead before options expire. That is, call (buy) options are in the majority.

Selling pressure on Ethereum

Over the past 30 days, the ETH price has increased by 96%, bringing the price up to $ 4,200. This has driven the current open interest in Ether options to record highs.

Consequently, options for this date are quite highly liquid: there is a lot of interest from buyers and sellers. However, this only indicates that after expiration, the asset’s volatility is likely to increase.

According to some experts, the price of Ethereum can change dramatically, but it is impossible to predict which direction. Since this derivative gives the right to purchase an asset, but calls for it. Although, this type of derivatives is in great demand from both sellers and buyers, experts explain.

Thus, the trend of movement is very difficult to predict … the rate will rush either up or down, which usually happens when trading large volumes. But in which direction – it is impossible to predict from the available information.

Such a large number of Ethereum options, coupled with the close of the month, will undoubtedly increase selling pressure on Ethereum, leading to a possible correction. On the other hand, when May ends, June will provide Ethereum with a new environment to thrive.

In addition, experts add that buying the cryptocurrency itself is a good investment idea. Ethereum is one of the best smart contract platforms out there and has a large number of stablecoins running on it. Altcoin’s current price levels characterize it well relative to Bitcoin.

There are reasons to invest in Ethereum for the long term. One of them is the development of the DeFi sphere of decentralized finance.

The bulls have a decent win

The bulls have an advantage as their call (buy) options are in the majority. And the impressive growth in decentralized apps and daily Ethereum network transfers and transactions should fuel Ether bulls even more. As for the bears, this game seems to be completely lost. The expiration date approaches, more and more put options lose their value.

As such, there is little evidence at this point to believe that the expiration of the options on May 14 will bring any surprise to the price of ether.

Moreover, it is possible that ETH is on its way to new all-time highs.

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