Ethereum bulls dominate as $ 1.55 billion expires today

Ether has been in a downtrend since early September and the market crash caused by China Evergrande’s risk of default pushed it below $ 2,700 on September 20, a 47-day low.

Oddly enough, Ether only tested the psychological $ 4,000 mark three weeks ago, but that all changed after crypto regulation concerns and fears about the Chinese debt market grew, resulting in a massive sell-off in global markets.

This week, SEC chairman Gary Gensler spoke to the Washington Post about new plans to crack down on the crypto sector and the burgeoning stablecoin market.

Ether’s downtrend was reversed on September 22, after Federal Reserve Chairman Jerome Powell confirmed the continuation of a monthly bond purchase program of at least $ 120 billion, particularly through the central bank through 2022. Powell also made it clear that there should be no rate hikes in 2021.

Ether price chart | Source: TradingView

Although Ether is now at $ 3,000, 25% below its recent high of $ 4,000, Ether is still growing 215% in 2021 and the total value (TVL) on the network is $ 13 billion in the network In 2020, it rose to $ 60 billion today, signaling strong acceptance despite rising gasoline prices.

Synthesized Ether Options expire on September 24th | Source: Bybt.com

As shown above, the bulls appear to have been taken by surprise as 72% of the call options are placed at $ 3,200 or higher. Therefore, if Ether stays below this price today, only $ 260 million in neutral to bullish call options will be activated on expiry.

A call option is the right to sell Ether at a set price on a set expiration date. As a result, the $ 3,200 put option will be worthless if Ether stays below that price through September 24th at 3:00 p.m. (UTC).

Bulls are still winning $ 1.55 billion in ether options expired today

The call-to-put ratio of 1.48 represents the difference between a $ 920 million call option and a $ 620 million put option. This data requires more detailed analysis as some bets are given of the current $ 3,000 level are unlikely.

Here are the four most likely scenarios considering the current price of Ether. The imbalance in favor of one of the parties represents a theoretical gain from the time of forfeiture.

• From $ 2,700 to $ 2,900: 61,900 buy orders vs. 72,000 sell orders. The net result was $ 27 million in favor of put options (bears).
• From $ 2,900 to $ 3,000: 79,900 buy orders vs. 52,200 sell orders. The net result is $ 80 million in favor of call options (bulls).
• From $ 3,000 to $ 3,200: 82,500 buy orders vs. 37,300 sell orders. The net result is $ 136 million in favor of the call (bull).
• Over $ 3,200: 99,600 buy orders vs. 20,200 sell orders. Net income supports additional call options of $ 255 million.

This rough estimate assumes that calls are only used in bullish strategies and put options are used in neutral to bearish trades. However, investors often use more complex strategies with different expiration dates. In addition, there is no way to know if arbitrage tables are fully covered.

To win, bears must keep ether below $ 2,900

Both the bulls and the bears will try to show their strength and the bears will try to minimize the damage. On the flip side, the bulls will have the situation well under control if the ether price stays above $ 3,000.

The main test will be the $ 2,900 level as the bears have significant momentum to drop to that level, if only for a moment. Even if there is scope for additional volatility in advance, the bulls look better positioned.

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According to Cointelegraph

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